Energy

Gas Prices Expected to Drop, Still Higher Than Last Year for Holiday Motorists

Paul Ausick

Published: December 19, 2019 11:00 am

Americans planning to drive to holiday celebrations can expect to pay between $2.40 and $2.45 a gallon for regular gasoline, according to AAA. That’s about a dime to $0.15 less than the $2.55 a gallon they’re paying today, but at least $0.15 a gallon more than they paid last year at this time.

The higher price is due to a jump of about $13 per barrel in crude oil. Last year, West Texas Intermediate sold for around $47.50 a barrel, compared with a spot price Thursday morning of $60.75 a barrel. Since the end of November, crude prices have risen by about $5 a barrel, largely as a result of the OPEC+ decision to produce less oil.

AAA forecasts that motorists in the Rocky Mountain region could see gas prices drop by as much as $0.25 a gallon between now and the end of the year, thanks to higher refinery run rates and ample inventories of refined products. West Coast drivers also may see prices fall by up to $0.25 a gallon as refineries have completed scheduled and unscheduled maintenance that forced prices higher in the past two months.

Jeanette Casselano, director of public relations at AAA, commented, “Depending on where you live in the country, you will see gas prices drop anywhere between a nickel and a quarter this month. While that will offer savings to motorists, it is not as much as they saw last December. Gas prices are more expensive year-over-year in part due to higher crude prices this winter over last.”

In the Southeast, motorists could see prices drop by up to $0.15 a gallon while drivers in the Great Lakes and Central region may see prices fall by a dime. Mid-Atlantic and Northeast regions are likely to see decreases of less than a dime, according to AAA. See how much gas cost the year you were born.

“The reduction in global crude supply is expected to help drain the market, which will likely be oversupplied during the first half of next year. This could potentially mean expensive crude oil and gas prices in January as compared to the start of recent years, assuming crude demand remains robust,” Casselano added.

The U.S. Energy Information Administration on Wednesday reported that U.S. crude oil inventories dropped by 1.1 million barrels week over week to 446.8 million barrels. Gasoline inventories increased by 2.5 million barrels and distillate inventories increased by 1.5 million barrels. Refineries were operating at 90.6% of capacity and processed 16.6 million barrels a day, down by 35,000 barrels week over week. Year over year, refinery runs were down by nearly 850,000 barrels a day.