A new report now claims gasoline prices may plunge to $2.50 as soon as late October with some states going lower.
Gasoline prices are known to fluctuate seasonally, typically rising from mid-winter through summer and then declining in the fall.
Currently, prices are on a downward trend, with many American drivers likely to see prices fall below $3 a gallon by the end of October.
In some regions, prices could even dip to $2.50.
The recent decline in prices can be attributed to a significant drop in West Texas Intermediate crude oil, which closed at $65.75 a barrel, its lowest level since August 2021.
This marks a 19.4% decrease in the third quarter and an 8.2% decrease this year, driven by a new oil demand forecast from OPEC that has sparked a market sell-off.
Crude oil comprises about half the cost of gasoline, making these shifts impactful.
According to GasBuddy.com, the national average for gasoline is currently $3.248 per gallon, while the American Automobile Association (AAA) reports it slightly higher at $3.26.
Both figures represent a decline of 42 cents, or 11.4%, since reaching a peak earlier this year.
Notably, 11 states are already enjoying prices below $3, including Alabama, Arkansas, and Texas, with Mississippi currently holding the lowest average at about $2.75.
Market analysts, including Tom Kloza from the Oil Price Information Service, project that gas prices could continue to decline at a rate of about a penny per day over the next month, potentially bringing the national average below $3 by October 3.
Kloza also suggests that $2.50 per gallon is a realistic target by Election Day, November 5.
While some areas might see prices dip below $2, this would likely only occur in states with currently low prices, such as Mississippi, Texas, and Louisiana.
The last instance of U.S. prices falling under $2 was between March 31 and June 5, 2020.
However, several factors could influence future prices, including weather events, geopolitical developments, and OPEC’s control over oil supply, reports The Street.
Tropical Storm Francine is expected to become a hurricane and may disrupt oil production and refining in the Gulf of Mexico, where nearly half of the U.S. refinery capacity is located.
Despite the approaching storm, traders have remained relatively unfazed, with crude prices still below $70 a barrel.
OPEC’s ability to influence oil prices is limited as it faces competition from the U.S., the world’s leading oil producer.
Additionally, softening demand from major economies, such as China, and the growing prevalence of electric vehicles are also contributing to lower gasoline demand.
However, states like Oregon, Idaho, and California may continue to see higher prices due to taxes and regulations.
Overall, residents across the U.S. can expect to benefit from falling gas prices in the near future.
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Also Read: A Struggling Gas Station Chain Now Files An Unexpected Bankruptcy
Other Economy News Today
A massive gas station is now closing 1,000 locations, confirming it will shift its resources to provide EV charging stations.
Shell, the second-largest gas station chain in the U.S. by location count, has announced its intention to close 1,000 gas pumps as part of a major transition to electric vehicle (EV) charging.
This strategic move aims to position Shell competitively against emerging Level 3 charging brands.
The company outlined its plans in its 2024 Energy Transition Strategy, indicating it will close 500 gas stations in 2024 and another 500 in 2025.
With approximately 14,000 Shell gas stations across 49 states, this shift reflects a significant change in the company’s approach to energy.
Since 2007, Shell has moved away from owning its nationwide fleet, opting instead to license stores to franchisees.
However, in recent years, the company has begun repurchasing several hundred locations, particularly in Texas and New Mexico, investing $2.3 billion in construction projects for non-energy ventures, including convenience stores.
Shell’s goal is to electrify its company-owned stations as part of a broader commitment to clean energy and reducing carbon emissions, responding to evolving customer preferences.
Executives believe Shell’s extensive network positions it well to compete in the growing EV market.
In a recent financial report, the company emphasized its competitive advantages, such as offering customers food and beverages while they charge their vehicles.
Currently, Shell operates around 4,000 EV charging plugs in the U.S., and the electric vehicle market has seen significant growth in 2024, with brands like Hyundai, Ford, Lucid, and Rivian reporting record sales of all-electric cars.
However, Tesla has fallen short of sales expectations this year, leading other automakers like Ford, GM, Volkswagen, and Volvo to reassess their all-electric strategies.
In a statement to the U.S. Sun, Shell expressed its commitment to “paced growth in key markets,” focusing on expanding its retail operations and charging infrastructure as part of its transition to a more sustainable energy model.
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