National Average Gas Price Dips Under $3 for the First Time This Year

Lower gasoline prices could aid individuals in recuperating from excessive holiday spending.

GasBuddy.com analyst Patrick De Haan highlighted a potential window of opportunity in the next six weeks for the national average to fall below three dollars per gallon.

This last occurred in May 2021, and a mere five-cent decrease is all that's required to reach this threshold.

While this dip has already transpired in many parts of the country, some states, such as Hawaii, California, and Washington, continue to experience higher average pump prices exceeding four dollars per gallon, as reported in the daily update by AAA.

Over the past 10 days, gasoline prices have fluctuated within a two-cent range, with the current nationwide average standing at $3.10 per gallon.

However, Triple-A spokesperson Andrew Gross notes that the median average is $2.79, as the national figure is significantly impacted by elevated prices on the West Coast.

According to Gross, approximately 80,000 out of the 120,000 gas stations across the country currently sell gas below $3 per gallon, providing insights into the varied pricing landscape across different regions of the United States.

According to De Haan and Gross, seasonal considerations include the comparatively low demand for petrol during the post-holiday travel season.

Mid- to late-February is usually when the annual trend of decreasing gas prices comes to an end as refineries begin maintenance and transition to more expensive, cleaner mixes.

If nothing unusual happens, or what De Haan called "wild cards," petrol prices should level out this month or the following, he said. Six weeks later, they should begin to rise, going from 35 cents to 85 cents and pushing the national average up to the top $3.00 area by Memorial Day.

Growing Tensions in the Red Sea

Growing tensions in the Red Sea, one of the busiest trading routes in the world, temporarily shook the oil market on Tuesday.

Following an attack on one of its ships by terrorists, Danish shipping company Maersk decided to halt transport in the Red Sea and Gulf of Aden until further notice on Tuesday.

This led to a spike in oil prices that later declined. The move extended a 48-hour moratorium that had been imposed on Sunday in the wake of the attack during the weekend.

For several weeks, Yemeni Houthi rebels have been attacking ships in the Red Sea and the Bab al-Mandab Strait-a vital route that links the Arabian and Red oceans. They have done this by using drones and rockets.

Attacks on the high seas are delaying oil and other supplies, not preventing them from reaching their destinations.

The incidents serve as a reminder that while the current Mideast issue poses possible risks to energy supplies beyond the Strait of Hormuz, there is no significant risk to oil and gas flows, according to a research released by Eurasia Group analysts in late November.

According to Gross, a worldwide incident would have to date back to the Russian invasion of Ukraine to cause oil prices to drop to the point where gas prices were affected in ten days or less. "That war is grinding on and along with the war in the Middle East, yet oil prices are struggling to stay above $70 a barrel."

Global benchmark Brent crude just dropped 50 cents, or 0.7%, to $76.54 a barrel after surpassing $79 a barrel. At $70.96 a barrel, U.S. crude lost 67 cents, or 1%, of its value.

Not even OPEC's threatened production cuts have raised oil prices significantly. "It's too soon to say OPEC's clout is diminished, but they are not the only game in town," said Gross. She pointed out that the U.S. is producing more oil than it has in the past, to the extent that U.S. businesses are exporting both gasoline and crude.