Gas prices are at their lowest levels of the year as Thanksgiving approaches. The national average is $3.30 per gallon, down $0.25 from last month — and $0.36 less than a year ago, according to AAA data.
Drivers in twelve states are now seeing averages below $3.00 per gallon. Even the most expensive state, California, now sees an average price below $5.00, at $4.96, down $0.50 from a month ago.
The steady decline is a boon for the Biden administration in a year when consumers saw the cost of housing, food and services rise. “The president wants – especially as we approach Thanksgiving and then Christmas, New Years and the holiday season – to give the American public and the American family a break. And that’s what we’re seeing now,” Amos Hochstein, senior energy adviser to President Biden, told Yahoo Finance.
Hochstein pointed out that prices at the pump are at the lowest Thanksgiving level since 2020 and well below their all-time highs from nearly a year and a half ago.
“It’s not really one region versus another, but the whole country is seeing falling prices,” he added.
Cheaper winter mix, lower seasonal demand and reduced wholesale margins are all contributing to what one analyst predicted would cause prices to fall “like wet feathers”.
The decline comes just in time for what is expected to be the third busiest Thanksgiving travel period since AAA began keeping records more than two decades ago.
However, $3 a gallon remains a “problem” for 40 percent of drivers surveyed by AAA, according to Robert Sinclair, the organization’s senior director for the Northeast.
“I’m not going to break out the champagne yet,” Sinclair said. “Demand is down 3% this year compared to last year. Gasoline was more expensive last year, but we’re buying less of it now. I think that’s a strong indicator of what’s happening goes into personal finance.”
Drivers can expect prices to continue to fall if oil continues its downward trend. West Texas Intermediate (CL=F) and Brent (BZ=F) crude prices have had a volatile year and are currently about 17% below their last year’s average.
Oil costs make up about 50% of what drivers pay at the pump, according to AAA. They tend to rise again with the return of summer mix gas along with longer days and warmer weather, prompting people to hit the road.
Ines Ferre is a senior economics reporter for Yahoo Finance. Follow her on Twitter at @ines_ferre.
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