No matter which political party takes the wheel in Congress, American drivers are getting a win this Election Day. In spite of new sanctions curtailing Iran’s oil exports, prices at the pump are plummeting. According to one expert, drivers in certain parts of the country could see gas prices drop below $2 a gallon this fall.
“There are a few stations in the South where the price of gasoline is under $2 and a couple of thousand points where the price is below $2.25 already,” said Tom Kloza, global head of energy analysis at Oil Price Information Service. The lowest prices currently can be found in Alabama, Missouri, Oklahoma, Louisiana, and Texas.
According to AAA, the national gas price average on Monday was the lowest it’s been in six months. The state with the cheapest average price was Delaware at $2.44, and seven other states were below the $2.50 mark. In the continental U.S., the state with the highest average price was California, at $3.75. Even drivers in Hawaii, where gas is almost always the most expensive, were getting a bit of a break with an average price of $3.91.
“Motorists likely have seen the worst in terms of retail prices for the year,” said AAA spokeswoman Jeanette Casselano. “If the crude oil market remains steady, gas prices are likely to continue to fall as much as 10 cents in the near-term.” AAA data shows that the average price of gas this year is still higher than it was at the same point in the calendar for the last three years, but some analysts predict it could touch levels last seen in the final months of 2017.
“We’ve seen a big downturn,” said Patrick DeHaan, chief petroleum analyst at GasBuddy. At $2.73, the current national average has fallen nearly 20 cents in the last month, he said. “I think prices may inch lower for the next couple of weeks,” he said. DeHaan predicted that the run of lower prices could last through Thanksgiving or early December, and estimated that prices could drop another 10 or even 20 cents from their current level.
“I think a lot of why we’re in the current environment has to do with some of the jitters we’ve seen on Wall Street in the past month — the overall sentiment has been a bit of anxiousness, and of course, uncertainty over lingering trade issues with China have really pushed the market down,” he said.
In the longer term, the Iran sanctions could push the price of oil higher, DeHaan said, but he noted that waivers granted to China, India, Japan, South Korea, Taiwan, Turkey, Greece and Italy would keep at least some Iranian oil flowing into the global market. "It’s fairly clear to me as an analyst that in issuing waivers on Iran, President Donald Trump is basically trying to soften the blow on fallout from the deal. He wants cheaper oil prices,” DeHaan said.
Kloza suggested gas prices could remain in a trough through the end of the year — giving Americans more money in their wallets around the holidays. “It means they’ll have a little bit more money to spend inside the stores, to go to the movies or to spend at restaurants,” he said.
If nothing else, this gives politicians one less thing to bicker about. “Gasoline is not going to be a topic for the election and perhaps six weeks ago, we thought it might be,” Kloza said.