Gasoline prices continued their seasonal downward drift on Dec. 14, falling two and a half cents per gallon compared to a week earlier and down nine cents from a month ago, though they remain up $1.16 compared to a year ago as experts wonder if the falling trend can last amid oil price uncertainty.
The national average regular gasoline price fell to $3.323 per gallon on Dec. 14, according to the AAA, down from $3.413 a month ago but still far above the year ago average of $2.164 a gallon.
According to the Energy Information Administration (EIA), U.S. regular gasoline retail prices averaged $3.39 per gallon in November, which was the highest monthly average since September 2014.
“Gas prices tend to fall a bit this time of year due to the shorter days and less robust demand,” Andrew Gross, AAA spokesperson, said in a statement. “And this trend was assisted by the recent steep drop in oil prices due to fears over the omicron variant. But the variant’s impact on pricing appears to be fading, so it remains to be seen if oil prices stabilize or move higher.”
Omicron headlines several weeks ago sparked fears of renewed lockdowns, sending crude prices tumbling over 11 percent on Nov. 26, one of the biggest ever one-day plunges. Oil prices have since recovered some of those losses, with WTI trading at around $72 a barrel and Brent at around $74 a barrel at the time of reporting, though they remain well below recent highs of around $85 a barrel in late October.
GasBuddy head petroleum analyst Patrick De Haan on Twitter noted week-over-week drops in gasoline demand of between 2.2 percent and 4.7 percent in all five of the nation’s PADD districts. He said he expects retail gas prices to fall below $3.30 per gallon in the next 72 hours.
Tom Kloza, global head of energy analysis at the Oil Price Information Service (OPIS) at IHS Markit said in a Twitter post that he expects drivers will see some further drops in gasoline prices through the beginning of January.
“OPIS/AAA reports U.S. gas price average dips below $3.33 gal for the first time in 56 days. Sans California, U.S. average price is $3.214 gal. More modest decreases forthcoming between now and the Epiphany,” Kloza wrote.
Surging gasoline prices have posed a political problem for the Biden administration, with Republicans criticizing Biden for relying on OPEC to boost supply to cool prices at the pump, rather than boosting domestic oil production.
After taking office in January, Biden signed executive orders that shut down construction of the Keystone XL pipeline, which would have been able to transport oil into the United States from oilfields in Alberta, Canada. The administration also put a freeze on some new drilling sites.