Saturday, January 28, 2023
HomeMarketGas Prices Are Falling Fast, Latest Data Show

Gas Prices Are Falling Fast, Latest Data Show

The average U.S. gasoline price is $3.61 per gallon, up from $3.40 a year ago, but down from a high of about $5 in June.

- Advertisement -

Frederic J. Brown/AFP via Getty Images

Drivers are likely to get a gift heading into the holidays—quickly falling gasoline prices. The latest stats released on Wednesday by the Energy Information Administration show that gasoline is building up in storage tanks, and overall demand remains weak.

Patrick De Haan, head of petroleum analysis at GasBuddy, predicts that some parts of the country could see prices fall by 50 cents per gallon or more over the next month. In Michigan, the drop could be as deep as 70 cents. 

For now, the average U.S. gasoline price is $3.61 per gallon, up from $3.40 a year ago, but down from its high of just above $5 in June. In one “fast case” projection for the path of gasoline prices, De Haan thinks they could drop below $3 by the end of the year.

The EIA report showed that the country’s inventories of gasoline grew by 3.1 million barrels in the latest week, bringing total supplies in line with year-ago levels. Refineries are pumping out an unusual amount of gasoline, using more capacity than they normally do this time of year. Usually, in winter, more refineries close for maintenance because demand slows down after the summer. But this year, refineries are running at higher capacities to take advantage of a shortage of diesel around the world that’s leading to very high margins. Because of the refining process, the more diesel they make, the more gasoline they tend to make, too.

In the last week, refineries in the U.S. used 92% of their capacity, up from 87% last year. Tom Kloza, the global head of energy analysis at the Oil Price Information Service (OPIS), wrote on Twitter that the EIA report is “suggestive of 2022 gasoline prices eventually dropping below year-ago levels.” That would mean that gasoline would suddenly become a deflationary asset on a year-over-year basis, after it was one of the largest contributors to inflation for much of the year. Cheap gas could be a boon for retailers, given that Americans would have more money to spend on gifts if they’re spending less at the pump. That would presumably help the
SPDR S&P Retail
exchange-traded fund (XRT).

Much could still happen before the end of the year to change the trajectory, of course. The European Union is about to ban Russian oil shipments, for instance, and any other disruptions to supply could also send prices higher in a hurry. But absent a large shift, gasoline looks like it’s headed lower.

Write to Avi Salzman at


- Advertisment -

Most Popular