Gasoline prices are headed lower going into the Thanksgiving holiday, creating a “tailwind” for drivers, predicts one energy analyst.
“People are going to have more money to spend based on spending less for gasoline,” Tom Kloza, head of energy analysis at OPIS, told Yahoo Finance Live.
“There is going to be a significant tailwind for consumers on their expenses for fuel,” he added.
The national average for gasoline sat at $3.33 per gallon as of Friday, according to AAA data, down from $3.58 a month ago. Kloza says drivers can expect those prices to fall even more.
“I think we’re going to go through Thanksgiving weekend with an average price well below $3.25. And I think most people in the country, with the exception of those on the Pacific Coast, are going to be able to buy fuel for less than $3 [per gallon],” he added.
Earlier this week, 11 states saw their average dip below the $3.00 per gallon level. Another fourteen were in a range between $3.01 and $3.25 per gallon.
Californians are still paying the most out of any area of the country with prices sitting at $5.02 per gallon as of Friday, down 57 cents in the last month.
Prices have been on a downward trend since September amid lower seasonal demand alongside use of less expensive winter grade gas.
Oil is also moving lower, headed for its fourth straight week of declines amid concerns of weaker demand and building inventories.
Crude futures now sit about 22% off their 2023 September highs, when calls for $100 per barrel became more common.
“I think that the predictions of $100 or higher were really hyperbole,” said Kloza.
“Between the summer and the beginning go the winter you tend to see a down cycle with crude that would take Brent to probably about $72 and change,” he added.
Concerns of a broadening conflict between Israel and Hamas caused prices to spike in October, only to unwind in recent weeks.
“What this proves is that you can have problems in the Middle East and all sorts of geopolitical possibilities. But until you prove it to the market, they’re not going to pursue those higher crude prices,” said Kloza.
West Texas Intermediate (CL=F) crude oil was trading 1% higher on Friday, just below $74 per barrel after sliding more than 4% in the prior session. Brent (BZ=F) crude oil, the international benchmark was hovering above the $78 level.
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