Gas Prices Are Below $3 in 15 States — How Long Before They Spike Again in 2024?

Driving a car in a winter snowstorm in Utah, USA.
RichLegg / Getty Images/iStockphoto

There’s finally some ease in oil prices which is much-welcomed news for Americans who have been feeling the pain at the pump for quite some time. Indeed, in several states, gas prices are below $3, according to AAA. But whether this trend will continue in 2024 remains to be seen.

As of Thursday, Nov. 30, 11 states in the U.S. had gas prices below $3, including Texas ($2.74), Mississippi and Oklahoma ($2.76), Georgia ($2.79) and Louisiana, ($2.89), according to AAA.

On the other hand, the states with the highest gas prices included California ($4.86), Hawaii ($4.71), Washington ($4.35) and Oregon ($4.01).

Several factors are helping to ease gas prices.

Dr. Ryan M. Yonk, economist with the American Institute for Economic Research, explained that retail prices for gasoline drop during the winter months as both the formulation of gasoline changes and driving and the corresponding demand for gasoline drops.

“Together they contribute to lower average prices, both the retail price of gasoline and to a lesser extent to oil prices generally,” said Yonk.

Yonk added that a modest increase in gasoline prices is likely closer to the Christmas holiday as demand increases a bit, but more substantial increases are likely to occur as demand increases heading into spring and as gasoline formulations change as well.

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“Other factors including increased demand for heating oil, if a colder-than-expected winter happens, could also impact the overall oil price, leading to earlier increases in gasoline prices,” he said. “In short, we should expect modest increases in response to holiday demand and larger increases as driving demand increases.”

In addition, the Associated Press reported that while the downward trend in gas prices is expected to continue at least into the New Year, “anything’s possible” for 2024.

For instance, some experts said that ongoing production cuts from the Organization of the Petroleum Exporting Countries and its partners (OPEC+) countries, which have made prices jump, could continue to be a factor.

The U.S. Energy Information Administration (EIA) revised its 2024 price expectations, forecasting that the Brent crude oil price will increase from an average of $90 per barrel (b) in the fourth quarter of 2023 to an average of $93/b in 2024. In turn, it expects gas to be at $3.61 per gallon in 2024.

The EIA also revised its 2024 U.S. consumption expectations, saying that it anticipates it to decline by 1% in 2024, which would result in the lowest per capita gasoline consumption in two decades.

“An increase in remote work in the United States, improvements in the fuel efficiency of the U.S. vehicle fleet, high gasoline prices, and persistently high inflation have reduced per capita gasoline demand,” the agency said in a statement.

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