At approximately $3.179 per gallon, the national gas price average continued to decline last week. Prices are now at the lowest level since February 2011. Some states are already reporting gas at less than $3 per gallon, and AAA spokesman Michael Green thinks the national average may dip lower.
“The national average could fall very close to $3 per gallon by the end of the year due to abundant supplies, declining demand and lower oil costs,” Green told United Press International. According to Green, this is the lowest price many people have paid for gas in 33 months.
In the United States, 25 percent of gas stations have prices that are under $3 per gallon. States where the average price per gallon is less than that amount are: Arkansas, Iowa, Kansas, Louisiana, Missouri, Oklahoma, and Texas. Only 10 percent of stations have prices above $3.50, according to AAA.
Prices have been projected to fall for several weeks. A monthly outlook and trends report by AAA forecast further declines based on the steady progression of lower prices in October, and historical data show that of the previous five years, four saw gas prices fall off at the end of the year, starting in November.
AAA spokesman Avery Ash, spread some holiday cheer in the report, as well. “Expect a nice holiday bonus in the form of much cheaper gas prices,” Ash said. “The national average should get tantalizingly close to $3 per gallon, and many consumers will find bargains below that price before the year is over.”
Less cheery but also a number not seen since 2011 is November’s Preliminary Index of Consumer Sentiment, which came in at a weak 72. Thompson Reuters produces the estimate, which falls short of the 74.5 median estimate economists gave Bloomberg before the data were released. A negative consumer confidence report may affect the holiday season, regardless of gas prices.
The National Retail Federation originally predicted a marginal uptick in holiday sales this year. It estimated that in November and December, a 3.9 percent increase, representing $602.1 billion, would occur compared to last year’s 3.5 percent increase. The number was calculated prior to the partial government shutdown, and the National Retail Federation has since moderated expectations, saying it is uncertain whether the actual number will meet, surpass, or fall short of predictions.
As a percentage of annual sales, 80.8 percent are holiday sales. Without more confidence by consumers, the “holiday bonus” from the gas pump may be stowed away, rather than spent in the economy.
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