Gas Prices at 3-Year Low Ahead of Holiday Season

SAN FRANCISCO - MAY 07: A customer pumps gasoline at a service station May 7, 2007 in San Francisco, California. Gas prices reached a record national average price of $3.07 per gallon of regular unleaded, up over twenty cents in the past two weeks. San Francisco leads the nation with the highest average price of $3.49 per gallon.
National Journal
Clare Foran
Nov. 27, 2013, 10:20 a.m.

As Amer­ic­ans pile in­to SUVs, se­dans, and minivans and hit the road to make it home in time for Thanks­giv­ing dur­ing the busiest driv­ing sea­son of the year, they’ll be­ne­fit from prices at the pump that are lower than a year ago.

The av­er­age price of a gal­lon of gas rose slightly this week to hit $3.29, ac­cord­ing to data re­leased on Wed­nes­day by the En­ergy In­form­a­tion Ad­min­is­tra­tion.

Des­pite the in­crease, however, the cur­rent na­tion­al av­er­age is 14 cents be­low what it was one year ago and gas prices haven’t been this low ahead of the Thanks­giv­ing hol­i­day since 2010.

Some ex­perts, in­clud­ing Tom Kloza, the chief oil ana­lyst at the Oil In­form­a­tion Ser­vice, be­lieve prices could con­tin­ue to drop through the end of the year, with Kloza es­tim­at­ing that the av­er­age could fall to $3.05 in Decem­ber.

The largest piece of the puzzle con­trib­ut­ing to low prices at the pump is the lowered cost of crude oil, which has de­clined in re­cent weeks due to de­creased de­mand.

But don’t ex­pect things to say this way. The EIA pre­dicts that gas prices will in­crease to an av­er­age of $3.33 per gal­lon in the first quarter of next year and es­tim­ates that the an­nu­al av­er­age for 2014 will come in at around $3.39 over­all.

To the ex­tent that prices con­tin­ue to drop, however, re­tail­ers may see an up­tick in sales dur­ing the hol­i­day shop­ping peri­od.

“[Con­sumers] be­come less sur­gic­al in their shop­ping be­ha­vi­or,” Bill Mar­tin, ex­ec­ut­ive vice pres­id­ent of re­tail ana­lyst Shop­per­Trak, told the As­so­ci­ated Press. “That opens the door to more im­pulse buy­ing.”

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