INDIANA – As of Tuesday, the national average for gas prices stood just below $3.25, according to AAA. That’s down 25 cents from a month ago and 30 cents less than this time last year. Experts point to a recent decline in oil prices and a seasonal dip in demand, as well as easing inflation.
Gas prices in Lawrence County for regular fuel range from $2.89 a gallon to $2.94. For diesel, prices range from $3.49 to $4.19 a gallon.
Each penny decline in the national average saves motorists close to $3.8 million, according to Patrick De Haan, head of petroleum analysis at GasBuddy. “If you amplify that times 30 cents, we’re talking about Americans that are spending hundreds of millions less on gasoline today than they were a year ago.”
Despite the drop, the global energy market can be volatile, and lower gas prices down the road aren’t promised.
A big explanation behind the decline is seasonality – prices at the pump almost always ease at this time of year.
There’s a switch to winter-blend gasoline — which is cheaper to produce than the summer blend. And, despite some upticks around the holidays, shorter days make hitting the road less enticing in the colder months.
On top of the seasonal cycle, inflation, while down from last year, is still high and continues to undercut Americans’ spending habits — which could also be contributing to today’s lower demand, De Haan added.
Beyond demand, experts also point to declining oil costs. Prices at the pump are highly dependent on crude oil, which is the main ingredient in gasoline. West Texas Intermediate crude, the U.S. benchmark, has stayed in the high-to-mid $70s for the past three weeks — standing at about $76 a barrel as of Tuesday afternoon, down from over $82 a month ago.
Oil is a global commodity, so events impacting production and supply such as the Russia-Ukraine war can be felt domestically. There’s also been a notable uptick in U.S. production that is “helping to keep a lid on prices” today, De Haan said.
At the start of October, American oil production hit an all-time high of 13.2 million barrels per day, passing the previous record set in early 2020 by 100,000 barrels. Average production has since remained at that level, according to the government’s latest data through the week of Nov. 17.
While the downward trend in gas prices is expected to continue at least into the New Year, anything’s possible. Some experts point to the potential of more cuts from major producing OPEC+ countries — which boosted energy prices in the past.
While gas prices nationwide are collectively falling, some states, of course, always have cheaper averages than others — due to factors ranging from nearby refinery supply to local fuel requirements.
As of Tuesday, according to AAA, 15 states in the U.S. had gas prices below $3 — with Texas ($2.71), Mississippi ($2.76) and Georgia ($2.79) at the lowest.
Meanwhile, the states with the highest prices at the pump were led by California ($4.88), Hawaii ($4.72) and Washington ($4.34).
