American drivers are heading into the holidays with welcome relief at the pump. Gas prices across the U.S. have dropped to their lowest levels since early 2021.
The national average price for regular unleaded gasoline now sits near $2.85 per gallon, according to GasBuddy. Prices have fallen by more than 20 cents over the past month. Analysts expect the downward trend to continue as Christmas approaches.
The timing matters. A record 122.4 million Americans plan to travel at least 50 miles starting December 20. Nearly 110 million of them will drive, based on estimates from AAA.
Lower prices are already making a difference. Compared with this time last year, drivers are saving close to $400 million every week nationwide.
What’s pushing fuel prices lower?
Several forces are working at once. Global oil supply continues to rise. OPEC has increased production to regain market share. U.S. producers have also boosted output. Domestic crude production now exceeds 13.8 million barrels per day, setting new records.
Seasonal factors add more pressure. Refineries have finished fall maintenance. Fuel supplies are growing. Winter-grade gasoline costs less to make than summer blends. Demand also drops during colder months, which helps hold prices down.
Oil markets reflect the same trend. U.S. benchmark crude fell to about $55 per barrel on December 16. That marks the lowest level since early 2021.
More relief ahead for drivers
GasBuddy analysts expect prices to keep easing. The national average could reach $2.79 per gallon by Christmas Day, assuming no major geopolitical shocks.
Some areas already see extreme lows. Around 60 gas stations nationwide now sell regular gasoline for under $2 per gallon. Most sit in Missouri, Colorado, Oklahoma, and Texas.
Diesel and jet fuel prices are falling as well. Gasoline has dropped the fastest. The trend helps cool inflation pressures across the economy.
Holiday travel makes a strong comeback
Year-end travel continues to rebound after the pandemic slump. Last year finally surpassed pre-pandemic records. This year should break them again.
“People want to travel,” said Stacey Barber, vice president of AAA Travel. “Some visit family. Others take road trips or plan warm-weather escapes. Lower gas prices make all of that easier.”
Drivers should still plan fuel stops carefully. Prices can shift quickly across state lines. Differences can reach 80 cents per gallon in some regions.
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