Gasoline prices fell by $0.50 a gallon since November, giving consumers a reprieve into the holiday season.
Prices have declined since early November with Americans saving a cumulative $200 million a day as of Dec. 6, said Patrick De Haan, head of petroleum analysis, at GasBuddy, a Boston-based provider of retail fuel pricing information and data.
Crude oil prices fell sharply on Tuesday, dipping by 3.72% to reach $74.10 a barrel for West Texas Intermediate, the U.S. benchmark while Brent crude oil, the international benchmark, declined more at 4.08% to $79.32.
The decline in the past several weeks could extend through December, reaching a low of $2.99 by Christmas.
The number of stations selling gasoline for under $3 a gallon has expanded throughout the U.S.
Gasoline prices have fallen even in California - Los Angeles now has seven gas stations selling at $3.99 a gallon or less and the number of stations lowering their prices will grow "significantly in the next two weeks," he said.
On Sunday, OPEC+ said it would maintain its current oil production targets.
The Group of Seven (G7) nations also agreed a price cap on Russian oil. On Dec. 2, the G7 nations and Australia adopted the $60 a barrel price cap for Russian crude oil. The price cap agreement is a strategy to limit the amount of revenue generated for Russia as it pursues its war against Ukraine.
Moscow said it does not plan to sell crude oil under the price cap while many OPEC ministers and oil analysts said the price cap is not as material since Russia sells its oil to India and China and other countries which still have not objected to Russia starting the war against Ukraine.
In October, OPEC+, which includes Russia, said it would lower production by 2 million barrels per day (bpd) from November until the end of 2023, which prompted action on the price cap.
OPEC+ meets again on Feb. 1.
Gasoline Prices Continue to Fall
Prices could fall to $2.99 beween Dec. 25 and New Year's Day, De Haan said previously.
"The pace of decline has slowed just a touch in the last few days, but still on par for average #gasprices to fall to $2.999/gal between Christmas and New Years Day," he tweeted.
Average diesel prices have also declined, falling by 30 cents a gallon during the past three weeks and are expected to continue dropping another 30 cents or more during the next three weeks, De Haan said.
The cumulative 2022 national average gas price is $4.01 a gallon and is "likely to fall below $4 a gallon on Dec. 13," he said.
Gasoline prices have faced a volatile year. As the U.S. dollar weakens, crude oil prices have rebounded. Crude oil is traded in the U.S. dollar and its strength has an inverse impact on oil prices.
China instituted a strict protocol, resulting in frequent lockdowns for covid-19 since the start of the pandemic. Chinese health officials said the country will increase the number of elderly people who are receiving covid-19 vaccinations as their constant lockdowns have resulted in recent extremely rare protests from its citizens who took to the streets to express their desire to seek more freedom.
