Kiplinger Energy Outlook: The Cheapest Gasoline in Years
But how long will gas prices stay near $3 per gallon?
Kiplinger’s Economic Outlooks are written by the staff of our weekly Kiplinger Letter and are unavailable elsewhere. Click here for a free issue of The Kiplinger Letter or to subscribe for the latest trends and forecasts from our highly experienced Kiplinger Letter team.
The national average price of regular unleaded dipped to about $3 per gallon this week, for the first time since May 2021, according to travel website AAA. Gas prices have been on a long, slow decline this year, helped in part by lower crude oil costs and weaker fuel demand once the summer travel season ended. Given that winter tends to be a time of less driving, gas prices could slip further in coming weeks, falling below the $3 level that consumers often view as the difference between reasonable and expensive. Of course, many states are already seeing prices starting with a 2; in Oklahoma, home to the cheapest gas in the nation, the state average is just $2.53 per gallon. Diesel fuel is also down notably, now averaging $3.06 per gallon nationwide; a year ago, it was a lofty $4.09.
As long as crude oil prices remain near their recent level of about $70 per barrel, the prices at gas stations should tick down or hold fairly stable. That’s what we expect for oil, barring some sort of geopolitical crisis that curbs oil production in the Middle East or another oil-rich region of the world. However, as spring nears, look for gasoline prices to start rising again, as refiners prepare for the start of the spring and summer travel season. A major price spike is unlikely as long as oil prices behave, but expect today’s $3 gas to rise into the low to mid-$3 range when warm weather returns.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Natural gas prices are rallying on relatively cold weather, which spells stronger demand as homeowners and businesses turn up their heat. Benchmark gas futures contracts were recently trading at $3.53 per million British thermal units, which is near their high for the year. For much of 2024, natural gas contracts were near or below $2 per MMBtu. While we don’t foresee a dramatic move higher, gas could stay elevated or rise a bit more if cold weather lasts over the heavily populated mid-Atlantic and Northeast. Fortunately for consumers, inventories of gas in underground storage are ample for this time of year, so it would take a severe and long-lasting cold snap to really strain supplies.
Related content
- Gas-Saving Tips That Actually Work
- Who Controls Gas Prices in the US?
- What Types of Car Insurance Do You Need?
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
Jim joined Kiplinger in December 2010, covering energy and commodities markets, autos, environment and sports business for The Kiplinger Letter. He is now the managing editor of The Kiplinger Letter and The Kiplinger Tax Letter. He also frequently appears on radio and podcasts to discuss the outlook for gasoline prices and new car technologies. Prior to joining Kiplinger, he covered federal grant funding and congressional appropriations for Thompson Publishing Group, writing for a range of print and online publications. He holds a BA in history from the University of Rochester.
-
You're an Accredited Investor. Now What?
As an accredited investor, you will have access to a more diverse pool of investment options. Here's what you need to know.
By Kim Clark Published
-
How Decentralized Finance Is Reshaping Investment
Four central innovations usher in this transformation.
By Clay Bethune Published
-
What Can Accredited Investors Do?
As an accredited investor, you will have access to a more diverse pool of investment options. Here's what you need to know.
By Kim Clark Published
-
Buying an Insurance Policy: Three Ways to Do It
You can buy an insurance policy through an insurance agent or broker or on the internet. Which way works best for you?
By Karl Susman, CPCU, LUTCF, CIC, CSFP, CFS, CPIA, AAI-M, PLCS Published
-
Stock Market Today: The Dow Adds 15 Points To End Its Losing Streak
Equity indexes opened higher but drifted lower as markets priced in new Fed forecasts.
By David Dittman Published
-
10 Ways Your 1031 Exchange Can Go Horribly Wrong
Don't let your tax-saving strategy become a financial nightmare — discover the hidden pitfalls that could turn your 1031 exchange into a costly disaster.
By Daniel Goodwin Published
-
From Entrepreneur to Retiree: Boosting Your Business' Value
When business owners contemplate retirement, their first step should be maximizing the value of their biggest asset. Here are a few steps that could help.
By Hilgardt Lamprecht, CFP®, CKA®, CExP™ Published
-
Stock Market Today: Dow Dives 1,123 Points After Fed
Market participants reacted predictably to a well-telegraphed hawkish turn by the Federal Reserve.
By David Dittman Published
-
Fed Sees Fewer Rate Cuts in 2025: What the Experts Are Saying
Federal Reserve The Federal Reserve cut interest rates as expected, but the future path of borrowing costs became more opaque.
By Dan Burrows Published
-
Jabil Stock Pops After a Beat-And-Raise Quarter
Jabil stock is higher Wednesday after the electronics firm beat earnings expectations and raised its full-year outlook. Here's what you need to know.
By Joey Solitro Published