U.S. Gas Average Hits $4.06 and Is Expected to Drop Below $4 Next Week
The national gas average is $4.06 a gallon and analysts expect it under $4 soon, the first time since July. Why prices are falling and what drivers may pay.
The average price of regular gasoline in the U.S. stood at $4.06 a gallon on Thursday, according to price-tracking firm GasBuddy, and analysts told CBS News it should slip below $4 within days. That would be the first time since July that the national average has been under that line.
Patrick De Haan, GasBuddy’s petroleum analyst, expects the drop by next week. He also expects diesel to fall below $6 a gallon by Thanksgiving, which matters to anyone driving a diesel vehicle on holiday trips.
What it means for drivers
People planning road trips for the holidays are likely to pay less at the pump than they did earlier in the fall. Tom Kloza, chief energy adviser for Gulf Oil, put the timing for a sub-$4 national average within the next 10 days.
Kloza also sees room for prices to keep falling. Gas stations currently make about 75 cents on each gallon they sell, he said, while a more typical markup is 40 cents. In an email to CBS News, he called the current margin “too outsized” and said pump prices should keep easing even if wholesale fuel prices stay where they are.
Why prices are falling
De Haan pointed to several causes. Oil prices dropped in the weeks before the midterm elections, which he linked to traders’ hopes that the vote would push Washington toward a deal to end the war in Iran. More oil tankers are moving through the Strait of Hormuz, which eases pressure on world supply.
Crude prices reflect the shift. Brent crude, the international benchmark, fell below $100 a barrel on Thursday for the first time since September and traded at $97.44 by midday. West Texas Intermediate, the U.S. benchmark, was at $90.42 a barrel.
The season helps too. Americans drive less in the fall once summer travel ends, and stations are moving to winter-blend gasoline, which costs less to make than the summer blend.
Federal steps on fuel supply
The administration has taken several steps aimed at fuel costs, according to CBS News. It widened access to tax-free red-dyed diesel, opened the way for Russian diesel imports and waived the Jones Act, a federal law requiring goods shipped between U.S. ports to travel on ships that are U.S.-built, U.S.-flagged and U.S.-crewed.
What to watch
De Haan’s forecasts put the next marks at gas under $4 by next week and diesel under $6 by Thanksgiving. Prices at individual stations vary, and the national average is a guide to the overall trend.
Source: CBS News
