As of Nov. 24, the average retail regular-grade gasoline price in the US is $2.82/gal, 47¢ lower than a year ago, and the lowest price heading into a Thanksgiving holiday since 2009, according to the US Energy Information Administration.
The Thanksgiving holiday is traditionally one of the most traveled times of the year in the US, and much of that travel is by car. According to the American Automobile Association, during this Thanksgiving holiday weekend (Nov. 26-30), 41.3 million people in the US will travel more than 50 miles from home by car, the highest number of travelers by car for Thanksgiving in 7 years and the third highest since AAA began publishing the data in 2000.
“Much of the decline in gasoline prices since mid-2014 is attributable to falling crude oil prices,” EIA said. A handful of core drivers for reduced crude oil prices include robust US crude oil production growth, a return of Libyan production (despite recent setbacks), weakening expectations for the global economy, and seasonally low refinery demand.
North Sea Brent spot prices have fallen from a July monthly average of $112/bbl to a November monthly average of $80/bbl (through Nov. 24). The average US retail regular-grade gasoline price has fallen 88¢/gal since the start of July.
EIA's November 2014 Short-Term Energy Outlook projects the US average retail price of regular gasoline will continue to decline for the remainder of the year and will average $2.80/gal in December. The STEO forecast of annual average US regular gasoline retail prices is $3.39/gal in 2014 and $2.94/gal in 2015, well below the $3.51/gal price in 2013. However, as discussed in the STEO, the current value of futures and options contracts implies a wide confidence interval for forecasts of crude oil, which is the main determinant for gasoline prices.
