With the October Consumer Price Index (CPI) report coming in well below estimates, gas prices and gas price predictions are in focus ahead of Thanksgiving. Indeed, gasoline prices decreased 5% in October compared to September, the single-largest contributor to the 0% month-over-month inflation recorded in the month.
What should you expect from fuel costs going forward?
Well, this year’s disinflation campaign has largely been bolstered by easing gas and fuel costs. Indeed, year-over-year (YOY) fuel oil and gasoline costs are down 21.4% and 5.3%, respectively. The national average for gas prices has either declined or held steady for roughly the last 60 days, according to an AAA press release. This has led to 11 states with sub-$3-per-gallon averages.
There may be more states joining them soon, however. GasBuddy, a gas price tracking and analysis organization, predicts an additional five states enjoying gas prices below $3 by Thanksgiving. GasBuddy also predicts that as the demand for fuel slides in the weeks following Thanksgiving, gas prices may also continue to ease, “leading to potentially the lowest gas prices since 2021 by Christmas.”
“As millions of Americans gear up to hit the road for Thanksgiving, the national average is seeing its longest streak of declines in over a year, reaching a ninth straight week as gas prices fall to their lowest since January,” said Patrick De Haan, Head of Petroleum Analysis at GasBuddy.
Interestingly, on Monday, mid-Atlantic gas station and convenience store chain Sheetz also announced that it will lower gas prices to $1.99 per gallon for its Unleaded 88 gas for Thanksgiving week through Monday, Nov. 27.
Gas Price Predictions: Where Will Gas Prices Go?
At the time of this writing, the average national gas price is sitting at about $3.30 per gallon. According to the U.S. Energy Information Administration (EIA), an expected 1% reduction in gasoline consumption in 2024 will push the country’s per capita gas consumption to its lowest point in two decades. Despite this, for the year, the EIA expects gasoline retail prices to actually increase from 2023 to 2024 from an average $3.55 per gallon this year to $3.61 per gallon in 2024.
In the long term, algorithm-based price forecasting service WalletInvestor predicts gas prices will rise to $3.673 per gallon by December 2025.
There are plenty of variables that may affect fuel costs going forward, including the war in Ukraine, weather conditions and the potential for further oil shortages. That said, at the moment, gas prices are well below where most forecasts expected them to be at the start of the year — and, for the moment, especially low at Sheetz!
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
