NEW YORK, Sept 12 (Askume) – Analysts said this week that asWith the U.S. election coming up in November, gasoline prices for American motorists could fall below $3 a gallon for the first time in three years by next month.
Lower fuel demand and lower oil prices have caused gasoline prices to drop, bringing relief to consumers who have been struggling with record high fuel costs that have fueled inflation. Lower pricesThat has prompted Vice President Kamala Harris and other Democrats to respond to Republican sharply to the pain of the pumps.Avoiding criticism can also help.
The national average price of regular gasoline was $3.25 a gallon as of Wednesday, down 19 cents from a month ago and 58 cents from the same time last year, according to motorists association AAA.
GasBuddy.com analyst Patrick De Haan said average gas prices will drop below $3 a gallon by the end of October as the summer driving season ends and retailers begin selling cheaper winter fuel in the coming weeks. Gas prices fell below $3 on Wednesday in North Carolina, a state considered key in the Nov. 5 presidential election.
“The American people will certainly remember the price tags they saw when they went to the polls, so this is certainly good news for Harris in her presidential race against Republican Donald Trump,” DeHaan said.
Research from the Wells Fargo Investment Institute and others shows that the U.S. president’s approval rating is inversely related to the price of gasoline. As a result, lower prices should benefit Democrats this election cycle, said John LaForge, the investment adviser’s head of real asset strategy.
In fact, the president has little direct influence over gasoline prices, which are driven by global supply and demand fundamentals. Prices have fallen sharply this year due to weaker-than-expected demand, particularly in the United States and China . Global benchmark Brent crude has fallen from over $90 a barrel in April to a nearly three-year low below $70 on Tuesday .
One wild card is Hurricane Francine, which passed over US offshore oil fields on Wednesday, sending US crude prices higher by more than $2 a barrel on fears of prolonged production shutdowns.
Oil prices rose to record highs of over $5 per gallon in 2022, largely due to supply disruptions following Russia’s invasion of Ukraine , while global fuel demand decreased as COVID-19 lockdowns eased.
Brian Cassens, senior portfolio manager at investment firm Tortoise, said strong supply this year should help restrain oil prices as refineries run at higher rates.
The US Energy Information Administration (EIA) said on Tuesday that US gasoline demand is expected to average 8.92 million barrels per day this year, down by about 20,000 barrels per day from last year. They had previously expected demand to be similar to last year in 2024.
Still, this level represents 9% of global oil demand and makes the United States the world’s largest consumer of fuel. This gives added visibility to the dollar-per-gallon number in any government scorecard.
Harris Booster
Republicans have repeatedly blamed President Joe Biden’s policies for raising gas prices and inflation during his tenure, but DeHaan said those attacks are having less impact as gas prices have fallen.
Labor Department data on Wednesday showed consumer prices rose 2.5% in the 12 months through August, the slowest annual increase since February 2021. Gasoline prices fell 10% annually, the largest annual drop since July 2023, the data showed.
Gasoline prices, as measured by the Consumer Price Index, have not risen since April.
Tom Kloza, director of energy analysis at Oil Prices International Services, said the impact of lower gasoline prices will be felt most in the states that ultimately decide the election.
Among those states, North Carolina’s average gas price fell to $2.983 a gallon on Wednesday, while Wisconsin’s average price was $3.043 a gallon, according to motorists’ organization AAA.
Diesel prices, a less obvious but more important indicator of the nation’s economic health, have seen similar trends due to weak demand and excess supply, AAA spokesman Andrew Gross said.
The higher cost of diesel, a fuel used primarily to manufacture and transport goods, could be passed on to consumers, pushing up the prices of everything from eggs to televisions.
The EIA on Tuesday lowered its US distillate demand forecast to 3.83 million barrels per day, about 1% lower than its previous forecast and 2.3% higher than the same period last year.
EIA data shows that as of Sept. 9, the national average diesel price fell to $3.56 a gallon, down 32 cents from the beginning of the year and the lowest level since October 2021.
“Whoever is the next president will certainly benefit from low oil prices and severe deflation,” Kloza said.
