The national average price for a gallon of regular gasoline in the U.S. has fallen below $3, according to GasBuddy, the first time it has reached the mark since last December as demand for oil has fallen and output has increased.
By Antonio Pequeño IV
Key Facts
The national average price for a gallon of gas fell to $2.99 on Sunday, the first time it has reached the price point since late December, GasBuddy reported.
Intra-day average prices fell to $2.97 late Monday morning, according to GasBuddy, which said the cost is “on track to potentially be the lowest daily average since May 2021.”
The decline in average prices is “largely” rooted in the Organization of the Petroleum Exporting Countries’ (OPEC) decision to up oil production, GasBuddy reported, noting a shift from the entity’s 2023 strategy of lowering production to boost prices.
Will Gas Prices Drop Even Further?
Trends generally point to a continued price drop, though GasBuddy noted a potential near-term increase in prices from higher gas costs in the Great Lakes due to a refinery fire in the region last week that raised wholesale gasoline prices. By the end of 2025, GasBuddy predicts prices “could dip into the $2.80s,” largely due to predictable factors, such as the usual drop in gas demand in the fall, following summer, one of the busiest driving seasons of the year. Weaker demand and easing inflation “has created the perfect environment for lower prices,” according to Patrick De Haan, head of petroleum analysis at GasBuddy, who added 2025 “brings the strongest potential for extended sub-$3 prices since 2021.” Prices could also be dropped by pumps that have already made or will make the switch to winter blend gasoline, a cheaper fuel source that translates to gas prices dropping somewhere between 10 cents to 30 cents per gallon in winter months, according to AAA.
Crucial Quote
“While some may be quick to assign political credit, the reality is that global supply dynamics — particularly OPEC’s production decisions — have been the primary force behind the relief drivers are seeing at the pump,” De Haan said. The White House on Monday credited President Donald Trump’s so-called unleashing of American energy.
Tangent
AAA reported national gas prices at $3.04 as of Monday, down about 14 cents year-over-year.
Where Are Gas Prices Cheapest—and Most Expensive?
Oklahoma is home to the cheapest fuel, on average, with the typical price of a gallon of gas at $2.51, according to AAA. Texas and Arkansas are the other two states falling in the sub-$2.60 club, the organization reported. California has the highest prices in the country, where AAA reported the average cost for a gallon of regular gas runs at $4.64.
Key Background
Gas prices hit an all-time high and became a focal point for political tensions in the summer of 2022, when prices stretched over the $5 mark. The record prices were attributed to low inventories, high demand and Russia’s invasion of Ukraine, the former country of which is one of the world’s largest oil producers. As prices fall, gasoline output has outpaced demand and driven prices down. OPEC+ producers (Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria and Oman) have eased up on voluntary cuts to oil production made in 2023, adding about 1.4 million barrels per day this year.
Opec-Plus: Group Unwinds Cuts, Delivers Record Compliance
In the six months that eight members of Opec-plus gradually unwound a 2023 production cut, or from April through September, they increased crude oil output by 2 million barrels per day, according to Energy Intelligence’s assessment. This is 500,000 b/d less than was allotted pursuant to their agreement in March.
Oil production from producers outside of the Organisation of Petroleum Exporting Countries (OPEC) will start to decline if oil prices fall to $60 per barrel, TotalEnergies (TTEF.PA)
, opens new tab CEO Patrick Pouyanne said on Tuesday.
"There is a point at $60 per barrel where we'll see the shale industry beginning to slow down," he said on the sidelines of a conference in London.