Gas Prices Drop Ahead of Labor Day
- Gas prices are down as Labor Day approaches, reaching lows not seen since 2021.
- Prices are 47 cents lower compared to last year, with experts predicting $3 gasoline in the near future.
- Consumers may benefit from lower fuel costs leading up to the holiday.
The national average price for a gallon of regular gasoline has decreased by over 20 cents since May, currently standing at $3.38, which is approximately 47 cents lower than the same period last year. Andrew Gross, a spokesperson for AAA, highlights the balancing act in pricing, noting that while states like Mississippi may have lower prices, others like California offset these averages. Last year, extreme heat in Texas and Hurricane Idalia's impact on Gulf oil production contributed to higher prices, but the market has since stabilized. As the U.S. enters peak hurricane season, which lasts from mid-August to late October, energy analysts remain cautious. Patrick De Haan from GasBuddy points out that while hurricanes can disrupt refinery operations, the industry typically transitions from summer to winter gasoline blends around August, which tends to mitigate price fluctuations. Tom Kloza of OPIS notes that late-season storms generally have a lesser impact on fuel prices due to this seasonal shift. Global geopolitical events, particularly involving Iran, could also influence gas prices, although Gross suggests that if tensions remain contained, the impact should be minimal. Notably, U.S. oil production is at a record high, even as domestic demand has decreased from 9.8 million barrels per day to around 9 million. The rise of electric vehicles (EVs) has played a role in curbing gasoline demand, albeit modestly, with each million EVs sold reducing demand by approximately 22,000 barrels daily.