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As drivers gear up for the busiest travel weekend of the year, gasoline prices are edging down. The national average price of regular unleaded stands at $3.06 per gallon today, according to travel website AAA. That’s about 20 cents per gallon cheaper than this time last year, and close to the psychologically important $3 threshold that makes gas seem expensive for many consumers. The last time the national average price of regular gas was under $3 was in May 2021, according to Department of Energy data. It might slip below that level sometime this coming week. And in many states, the average price is already well below $3. So, the millions of Americans hitting the road to visit family and friends this Thanksgiving can look forward to saving a few bucks at the pump. Diesel prices are also declining, with the national average now at $3.53. A year ago, it was $4.24, adding to overall inflation by raising the price of transporting goods across the country.
Oil prices remain volatile but are staying in a tight range. Benchmark West Texas Intermediate crude rarely trades far from $70 per barrel, despite a lot of short-term swings. Right now, it appears the oil market is fairly well supplied. Traders are nervous about both economic weakness in China, the world’s biggest oil importer, and the risk that conflict in the Middle East escalates and crimps the region’s oil exports. For now, those countervailing risks seem balanced, which is why oil prices are jittery but aren’t actually moving much. We expect WTI to continue trading near $70 per barrel for the remainder of autumn, and possibly weaken a bit as winter begins.
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While oil goes nowhere fast, natural gas prices are rallying on colder weather. The benchmark gas futures contract recently traded at $3.45 per million British thermal units, near its high for the year. For much of the year, gas languished close to $2 per MMBtu, and was so cheap that some producers started to shut down wells. Now, weather forecasts are showing colder-than-normal weather coming to the heavily populated Northeast and Mid-Atlantic, where gas is the most widely used heating fuel. The United States also relies heavily on gas to generate power, so sustained cold could really rev up demand for the fuel. We look for gas prices to remain volatile, but probably stay above $3 per MMBtu unless a warm spell arrives.
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