The cost of a gallon of gas continues to fall despite recent tensions in the oil market. The national average for regular unleaded has dropped about 3 cents to $3.60, according to AAA. This decline comes as oil prices hover around $90 per barrel. While oil prices did rise slightly after Hamas launched an attack on Israel, the increase was far less significant than previous events such as Russia’s invasion of Ukraine.
One of the main reasons for the drop in gas prices is lower demand from drivers and the introduction of less expensive blends of winter gasoline into the market. California, in particular, has seen a significant decrease in gas prices, with the statewide average dropping over 18 cents from the previous week. This is due to the earlier introduction of winter blend gas, which contains a cheaper ingredient that helps cars start at lower temperatures.
Gas prices in California are generally higher than the rest of the nation due to various factors. High local taxes account for about 13% of the price of a gallon of gas. California also has regulations for a special, more environmentally friendly blend of gas that tends to be more expensive. Additionally, the state relies on local production or foreign imports, as it does not have any pipelines available for transportation.
Experts predict that gas prices will continue to fall as long as there are no more geopolitical shocks or escalation in the conflict in the Middle East. Patrick De Haan, head of petroleum analysis at GasBuddy, believes that the national average still has some 15 to 35 cents of declining to do. However, this is dependent on unforeseeable actions and conflicts in the Middle East. Currently, gas prices are expected to reach their lowest level in six months.
The cost of gas varies across the United States, with some states experiencing higher prices than others. The five states with the most expensive gallon of gas, on average, are California, Washington, Nevada, Alaska, and Oregon. On the other hand, the cheapest gas can be found in Georgia, Mississippi, Texas, South Carolina, and Alabama.
Overall, despite recent tensions, gas prices are dropping due to lower demand and the introduction of less expensive winter blends. As long as there are no further conflicts or geopolitical shocks, experts predict that gas prices will continue to decline in the coming months.