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09/13/2022

Summer Driving Season Ends With Lowest Gas Prices Since March

The primary reason for the decline is the recent lower cost for oil.
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getting gas

WASHINGTON, D.C. — With the 2022 summer driving season in the rearview mirror, consumers are paying the lowest prices for gas since six months.

The national average price for a gallon of gas fell 7 cents in the past week to $3.71, a level not seen since the beginning of March. The primary reason for this decline is the recent lower cost for oil, according to AAA.

"Less expensive oil usually leads to less expensive gas for drivers," said Andrew Gross, AAA spokesperson. "This trend has helped pump prices fall steadily for three straight months and, with fall approaching, more markets could soon see prices below $3 per gallon."

Today's national average of $3.71 is 26 cents less than a month ago, but 54 cents more than a year ago.

The nation's top 10 largest weekly decreases are Maryland (15 cents), Delaware (14 cents), Connecticut (14 cents), New York (13 cents), Mississippi (13 cents), Texas (12 cents), Rhode Island (12 cents), New Jersey (12 cents), Massachusetts (12 cents) and New Hampshire (12 cents).

The nation's top 10 least expensive markets are Texas ($3.14), Mississippi ($3.15), Arkansas ($3.16), Louisiana ($3.19), Georgia ($3.24), Tennessee ($3.26), Oklahoma ($3.28), Alabama ($3.29), Missouri ($3.30) and South Carolina ($3.31).

Gas Demand

According to data from the Energy Information Administration (EIA), gas demand increased slightly from 8.59 million barrels per day to 8.73 million barrels per day last week. Meanwhile, total domestic gasoline stocks rose by 300,000 barrels to 214.8 million barrels.

Although gasoline demand has increased slightly, lower oil prices have led to falling pump prices. If gasoline demand begins to subside, as it typically does post-Labor Day with the end of summer driving, pump prices will likely continue to decrease, AAA reported.

Oil Market Dynamics 

At the close of the formal trading session on Sept. 9, the West Texas Intermediate increased by $3.25 to settle at $86.79. Although a weakening dollar helped to increase crude prices at the end of the week, prices dropped earlier in the week amid ongoing market concerns that oil demand will fall if economic growth slows or stalls due to a recession.

For this week, crude prices could decrease if demands concerns persist. Additionally, EIA's latest weekly report showed that total commercial crude inventories increased significantly by 8.9 million barrels to 427.2 million barrels.