Gas prices could fall below $3 a gallon: Analyst

With the summer travel season winding down, gas prices are starting to slip.

GasBuddy head of petroleum analysis Patrick De Haan expects the national average gas price to fall below $3, driven primarily by seasonal factors, saying "Americans just don't drive as much in fall." He also notes that the switch to cheaper winter gasoline and the decline in oil prices (CL=F) will help send prices lower too.

What could change that trajectory? Tropical storm Francine and other potential storms or hurricanes could pose a risk, De Haan says, adding geopolitical risk as another potential upward catalyst.

Watch the video above to find out where De Haan says prices in the US are highest and lowest.

For more expert insight and the latest market action, click here to watch this full episode of Asking for a Trend.

This post was written by Stephanie Mikulich.

Video Transcript

With fall approaching summer driving season is coming to an end and temperatures dipping in much of the country, gas prices dipping as well.

But will they stay lower?

Joining us?

Now, is Patrick de ha Gas buddy, head of petroleum analysis, Patrick?

Always good to see you.

Uh, let's just start big picture Patrick, where are gas prices right now nationally?

And, and where do you see them headed in?

Kind of, let's call it near intermediate term, Patrick?

Oh, Josh, for at least now, the national average is down for 6 to 8 weeks already.

So, uh, nice ending to the summer now that we're getting into cooler weather, that downward streak is continuing.

Uh, we expect that the national average will eventually fall below that $3 a gallon mark for the first time since 2021.

Now, keep in mind a lot of what we're seeing is seasonal that as gas prices would likely go down this time of year regardless of if oil was stable or even rising Americans just don't drive as much in fall and some, uh, loss of allure putting the boat in the lake when the air temperatures start dropping to the fifties and sixties.

So less demand.

We're also switching back to cheaper winter gasoline.

That's something that can happen Monday of next week and then the double dose of oil prices that have fallen to $65 a barrel.

Certainly going to help accelerate this train, this locomotive that's moving.

We expect the national average, as I mentioned is likely going to fall below $3 a gallon here in the next couple of weeks.

What, what would be some upside risk though to consider there, Patrick?

Oh, certainly.

Uh one city in the Gulf of Mexico right now, certainly a tropical storm.

Uh uh uh uh Florence.

Uh actually Francine, there's a lot of different names to get in hurricane season.

But uh Francine is something that we continue to monitor a couple of refineries, scaling back in preparation, hurricane season, still likely to be very busy.

There's a couple other areas of interest.

So while Francine being a relatively low storm may not impact prices, that hurricane season is something to keep an eye on at least for the next few weeks.

And of course, there's always the possibility that the Middle East could see violence at a moment's notice.

In addition, one wild card, we saw it overnight.

Ukraine continues to go after Russia with drones when those drones attack refineries that can lead to a little bit of upside to oil and refined products.

You know, Patrick, we always talk about gas prices nationally.

Let's break it down though.

A little bit more.

Where are gas prices highest right now?

Well, Josh, you can see a little bit of the map behind me.

California, uh, glowing yellow.

That is the nation's highest gasoline price prices there still well over the $4 a gallon mark.

Although if you use an app like gas, but you can find it under for the entire west coast still, especially northern California.

In fact, we're talking about the national average having gone down six straight weeks.

But if you're in northern California, the Bay area, even areas of southern Oregon, there have been some refinery glitches that have pushed prices up there.

Washington State, Oregon, of course, Hawaii and Alaska also still amongst the pricier states are the highest in my native California, Patrick, where I'm just curious, where are the lowest?

Well, uh again, the graphic behind me, uh You can just about head anywhere in the Gulf coast uh and see some of those low prices.

In fact, 12 states below $3 a gallon.

I picked out a station the other day rather incredibly in Mississippi 238 a gallon for a cash price and that, that was a couple of days ago.

So, uh you're seeing a flood of those sub $3 a gallon prices predominantly throughout much of the South.

How important Patrick are prices at the pump in terms of uh just shaping and impacting how consumers feel consumer sentiment.

I mean, it's huge whether you need, you need gasoline or not.

When you go by the gas station, it's kind of economic sentiment for how you feel the barometer for how you feel about the broader economy and these lower prices, these sub $3 prices are sure to boost consumer sentiment here going into the fall.

Biggest question is, will the fed deliver on a rate cut that will help Americans start feeling a little bit better about the cost of borrowing as well.

Patrick, always great to see you.

Thanks for popping on the show.

Thanks Josh.