Gasoline in the U.S. has fallen in price ahead of Christmas

The average price per gallon of gasoline in the U.S. dropped Thursday in the run-up to the Christmas holiday. Fuel prices, so far, are down 19 cents from a year ago. 

The Energy Information Administration (EIA) said that the average price of a gallon fell 4 cents to $3.101. The drop came as fuel demand rose from 8.26 million barrels per day (bpd) to 8.71 million. This figure, however, appears to be 300,000 bpd lower than the corresponding period in 2021.

Last week, gasoline inventories increased by 2.5 million barrels to 223.6 million barrels. But demand for fuel has failed to return to the 2021 level. Therefore, gasoline prices keep falling this week. 

Fuel prices have fallen 50 cents over the past month.

GasBuddy's Patrick DeHaan noted that U.S. gasoline prices could drop as low as $3 per gallon in the run-up to Christmas. This could be reasonable, as there are only 10 cents left before that level is reached. 

With demand being sluggish and inventories constantly being replenished, the market is going to see a drop in gasoline prices in 2023.