24/7 Wall St. Insights
- Gasoline and oil prices have weighed less on consumers in recent weeks.
- The state with the lowest average gas price per gallon is Texas.
- Also: Dividend legends to hold forever.
Gasoline prices have hardly moved in the past month and have come down slowly in the past year. Few people worry about increases in most states. In the summer of 2022, the price for an average gallon of regular nationwide was close to $5. Since inflation has fallen across most categories in the consumer price index, gas and oil prices weigh less on consumers. The gas price in Texas is $2.60 a gallon, and almost no one cares. It has the lowest gas price based on state figures in the United States.
Gas prices nationwide recently broke below $3. They are now $3.06, a fraction less than $3.16 a month ago. That means filling a 15-gallon gas tank rose $3 for the month. That compares to July 2022 when, at $5, gas was up from $1.95 in March 2021. Filling a 15-gallon tank then rose about $20.
For a middle- or lower-income family that drives frequently or long distances, the burden of $5 gas weighed on their disposable income. Food prices were high then, and the price of housing was jumping. That squeezed American household budgets.
Gasoline prices are almost exclusively tied to oil prices. Oil reached $117 a barrel in June 2022. It is now at $68 and slowly sinking. The price of gas could continue to fall. Crude over $100 was triggered primarily by supply interruptions due to Russia’s invasion of Ukraine. Today, the oil supply is abundant. The United States produced more oil in December than any nation in any month. OPEC+, which includes the Gulf nations, will likely raise supply next month. While China is the largest crude importer in the world, its economy has slowed considerably this year.
Absent a widespread war in the Middle East, there is no reason for crude to rise this year. So, gas prices in the United States will linger around $3 a gallon. With gas at $2.60 in Texas, which is as low as it has been in over two years, the price is so cheap that no one cares.
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