Gasoline prices in the U.S. are at their cheapest point since 2015, in the pre-Thanksgiving period, Energy Information Administration (EIA) Informed.
The average regular retail gasoline price this year was $2,10 per gallon. According to EIA’s Gasoline and Diesel Fuel Update, this price wasn’t seen since November of 2015.
These prices are mostly associated with low crude oil prices, as the price of crude oil barrels represent half of the total price per gallon of gasoline.
As we reported earlier this week, Brent crude oil barrel closed at $48 a barrel; this would be equal to $1,14 per gallon of gas, as “one barrel is volumetrically equivalent to 42 gallons”, EIA says.
“Crude oil prices are the most variable portion of retail gas prices; compared with other components such as taxes and distribution and marketing costs,” the report adds.
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Gasoline prices in downtrend to the end of the year
Also, public policies and agencies discouraging holiday travel, like the Centers for Disease Control and Prevention underlining driving behavior and safety measures to control the pandemic, are adding pressure to these prices.
In this sense, the American Automobile Association (AAA) expects a 4% decline in travels by car during the thanksgiving holiday, compared to last year’s same period.
The decline would be even sharper for travels by plane and bus, as the coronavirus pandemic has some countries at lockdown and with tight traveling measures. AAA expects declines in travels by plane of 48%, and for bus, train and cruise, of 76%.
This low gasoline prices trend has been ongoing for at least all of November. As we reported on November 2, gasoline prices were below the $2 mark on that date, due to the weakened demand that the pandemic forced.
Other seasonal factors like a typical demand drop in the autumn; average consumption decreasing due to the end of the summer driving season; and the end of daylight savings add up to this low gas price trend.
In fact, Tom Kloza, the chief oil analyst with the Oil Price Information Service, estimated that most people nationwide would be buying gasoline at $1.75 to the end of 2020.