GasBuddy predicts U.S. gas average to break below $4 by next week

The national average price for gasoline, which stood at $4.06 per gallon on Thursday, is expected to fall below the $4.00 threshold by next week. Patrick De Haan, a petroleum analyst at GasBuddy, told CBS News that the drop represents the first time the average has dipped under that level since July. He also projected that diesel prices could slide below $6.00 per gallon by the Thanksgiving holiday.

Crude oil markets have moved lower over the past several weeks. De Haan attributes this trend to market expectations that the United States would express public dissatisfaction with the war in Iran. This sentiment has placed pressure on the Trump administration to negotiate an end to the conflict, which in turn has stabilized energy markets. De Haan noted that oil prices have trended downward as the midterm elections approached, driven by optimism that political issues would be addressed after the vote.

Physical supply factors are also contributing to lower costs. De Haan observed that oil tanker traffic through the Strait of Hormuz has increased, easing constraints on the global supply and making more crude available to buyers. Benchmark prices reflect this shift. Brent crude, the international standard, fell below $100 per barrel on Thursday for the first time since September. By midday, it traded at $97.44. West Texas Intermediate, the primary U.S. benchmark, was trading at $90.42 per barrel during the same period.

Seasonal patterns are adding to the downward pressure. De Haan pointed out that gas prices typically dip in the fall as Americans reduce summer road trips. Filling stations are also beginning to switch to winter blend gas, which is generally less expensive to produce than the summer blend. This change in fuel formulation helps lower pump prices for consumers.

Tom Kloza, chief energy adviser for Gulf Oil, agrees that prices will decline. He predicts the average U.S. gas price will sink below $4.00 within the next 10 days. Kloza noted that gas station profit margins are currently higher than usual, sitting at approximately 75 cents per gallon. He stated in an email that this markup is historically outsized compared to a normal margin of around 40 cents per gallon. He argued that even if futures prices remain flat, pump prices should continue to decrease as stations adjust these margins.

The Trump administration has implemented several strategies to ease gas prices. These measures include expanding access to fuel sources and opening new supply options. The administration also waived the Jones Act, a federal statute that requires goods shipped between U.S. ports to be transported on ships that are U.S. built, U.S. flagged, and U.S. crewed.