Drivers Experience Relief at the Pump as Crude Prices Fluctuate

The respite could be temporary if gas demand keeps rising.

WASHINGTON, D.C. — The national average for a gallon of regular gas fell to $3.39 as of Feb. 23, three cents less than a month ago and 14 cents less than a year ago. 

The likely reason, according to AAA, is a drop in oil prices, which fell into the mid $70s per barrel, nearly $5 cheaper than a week ago.

"The cost for oil accounts for 55 percent of what we pay at the pump," said Andrew Gross, AAA spokesperson. "So, higher or lower oil costs will play a major role in the price we pay when fueling up."

According to new data from the U.S. Energy Information Administration (EIA), gas demand increased slightly from 8.27 million barrels per day (b/d) to 8.91 million b/d last week. Meanwhile, total domestic gasoline stocks decreased by 1.8 million barrels of crude oil (bbl) to 240.1 million bbl last week. This means that although fluctuating oil prices have contributed to pushing pump prices lower, if gas demand keeps rising amid tightening domestic stocks, drivers may see an end to future pump price drops.

AAA February 2023 Gas Pricing Chart

Since Feb. 16, the states that saw the largest drops in their average gas price are Ohio (-9 cents per gallon), Iowa (-7 cents), Tennessee (-7 cents), New Jersey (-7 cents), Wisconsin (-7 cents), Virginia (-6 cents), Rhode Island (-6 cents) and Alabama (-6 cents).

The nation's current top 10 least expensive markets are Texas ($2.96 per gallon), Mississippi ($2.99), Kentucky ($3.02), Missouri ($3.03), Arkansas ($3.04), South Carolina ($3.04), Alabama ($3.05), Tennessee ($3.06), Oklahoma ($3.07) and Louisiana ($3.07).

At the close of Wednesday's formal trading session, West Texas Intermediate decreased by $2.41 to settle at $73.95. Crude prices have declined due to the strengthening of the dollar and market concerns about increasing domestic oil inventories. An increase in supply could mean that demand may not move as high as anticipated. The EIA reported that total domestic commercial crude inventories increased substantially by 7.6 million bbl to 479 million bbl last week.