NEW YORK (AP) — Gas prices are once again on the decline across the U.S., bringing some relief to drivers now paying a little less to fill up their tanks.
The national average for gas prices on Monday stood around $3.44, according to AAA. That’s down about 9 cents from a week ago — marking the largest one-week drop recorded by the motor club so far in 2024. Monday’s average was also more than 19 cents less than it was a month ago and over 14 cents below the level seen this time last year.
Why the recent fall in prices at the pump? Industry analysts point to a blend of lackluster demand and strong supply — as well as relatively mild oil prices worldwide.
There are a few factors contributing to falling gas prices. For starters, fewer people may be hitting the road.
“Demand is just kind of shallow,” AAA spokesperson Andrew Gross said, pointing to trends seen last year and potential lingering impacts of the COVID-19 pandemic. “Traditionally — pre-pandemic — after Memorial Day, demand would start to pick up in the summertime. And we just don’t see it anymore.”
Last week, data from the Energy Information Administration showed that U.S. gasoline demand slipped to about 8.94 billion barrels a day. That might still sound like a lot — but before the pandemic, consumption could reach closer to the 10 billion barrel-a-day range at this time of year, Gross noted.
Beyond pandemic-specific impacts, experts note that high gas prices seen following Russia’s invasion of Ukraine in 2022 and persistent inflation may have led many Americans to modify their driving habits.
Other contributing factors could be the increased number of fuel-efficient cars, as well as electric vehicles, on the road today, Gross said.
Some of this is still seasonal. Patrick De Haan, head of petroleum analysis at GasBuddy, noted that gas prices typically ease in early summer because of refinery capacity. At this time of year, he said, many factors boosting prices in late winter and early spring — particularly refinery maintenance — are no longer present.
“Once refinery maintenance is done, output or utilization of the nation’s refineries goes up — and that contributes to rising supply,” De Haan said. And that stronger supply, paired with weaker consumption, has led to a “bit more noticeable” decline in prices this year. He added that U.S. refinery utilization is at some of its highest levels since the pandemic.
Separately, the Biden administration announced last month that it would be releasing 1 million gasoline barrels, or about 42 million gallons, from a Northeast reserve with an aim of lowering prices at the pump this summer. But De Haan noted that such action has little impact nationally — 42 million gallons equals less than three hours of U.S. daily gas consumption.
“Really, what we’re seeing right now with (declining) gasoline prices … has been driven primarily by seasonal and predictable economics,” he said.
What about oil prices?Experts also point to cooling 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 mid $70s a barrel over recent weeks — closing at under $78 a barrel Monday. That’s “not a bad place for it to be,” Gross said, noting that the cost of crude typically needs to go above $80 to put more pressure on pump prices.
Oil prices can be volatile and hard to predict because they’re subject to many global forces. That includes production cuts from OPEC and allied oil producing countries, which have previously contributed to rising energy prices.
