National Average Gas Prices Keep Coming Down, It's Not All Good News Yet

Right now, things are going our way when it comes to paying for fuel. For the time being, we’re looking almost good. The national average gas price for regular is sitting at $4.1 per gallon. That’s almost $1 less than the cost we all witnessed just a little over 30 days ago.

But that craze is now over. Americans everywhere are seeing the results of OPEC+ listening to world leaders and the positive outcome of sending the Commander in Chief to another country for a friendly negotiation.

But, at the end of the day, what matters most is that gas prices are coming down on a daily basis. It’s a slow downtrend. However, for the time being, it’s looking like a sure thing. Gas is only going to become cheaper for Americans that didn’t buy an EV yet. There’s still a long way to go, considering that last year the national average gas prices were $3.01 for a gallon. Right now, the premium gas price is at an average of $4.9 per gallon.

Things look a little worrying for diesel since the national average price is $5.2 a gallon right now. Around the same time last year, farmers, truckers, and construction workers were paying $3.2 a gallon.

Not everyone’s fortunate

Even though gas prices are on a clear downtrend, some states are not as lucky as others. On one end of the cost per gallon spectrum we have Texas and its state average of $3.6, while Californians still pay the most in the U.S. – the median is $5.5!

The clear distinction between Southern states and the West Coast remains valid even as prices are finding themselves coming down every 24 hours.

Nevada, Alaska, and Oregon continue to have the state average regular gas price at over $5 a gallon, while South Carolina is comfortably letting people pump their standard fuel at a state median price of $3.6, according to AAA updated data.

Most Americans noticed the change. That’s why people started using their internal combustion engine vehicles more and more again. This situation poses a couple of worries for the entire domestic gas and diesel market. We’re not yet anywhere close to having companies and traders not noticing the slight change in consumer behavior.

There are a couple of things that need to either remain as they are now or dramatically improve.

The worrying bits

At this point, demand is continuously growing. And it’s not happening only in the U.S. Countries like China or India get their fair share of the global production of gas and diesel. Even though there’s a general context of uncertainty, companies want to ramp up their operations, and more often than not that implies traveling, freighting, or making sure there are enough reserves available. On the other hand, moving military equipment and keeping all kinds of units active also contribute to the slightly growing demand.

Just to get a proper picture of what’s happening, after the most recent discounts Americans alone increased their gas consumption by 730,000 barrels in only a week. If the demand keeps growing, then it could hurt the price changes. Traders and gas companies will most likely act and make sure they get easy profits. After all, key players in the industry reported record profits in 2022 and remain adamant that there’s no way lower prices could’ve been made possible. They aren’t going to change this strategy.

Traders already acted on the increase in demand news and futures contracts rose in value by 0.1%. A barrel of Brent oil trades at $96.88, while WTI crude sits at $90.87.

OPEC+ might have something to say on the matter after member countries agreed they need to increase output. But they’ve decided only on 100,000 barrels per day. That’s just 0.1% of the current global oil demand.

Finally, we need to remember that a spike in demand will most likely end this downward gas price trend. So, it could be a good idea to buy some gas in large quantities daily if you’re a business that relies on transport. Otherwise, average consumers could just continue to carpool or give up the car in favor of public transport.