Gas prices drop, giving Americans relief at the pump just in time for Thanksgiving travel

There’s good news for Americans who plan to hit the roads next week for Thanksgiving: gas prices are falling nationwide, even in California.

The national average for a gallon of unleaded gasoline dropped on Tuesday to $3.353, the lowest since February, according to AAA, a federation of motor clubs throughout North America. Even in California, where prices are among the highest in the country, a gallon of unleaded has fallen to $5.059 per gallon from $5.638 a month ago and $5.138 last week, AAA said.

Gas app company GasBuddy posted an even lower average price for California. “$5 NO MORE…. California’s average gas price has fallen to $4.996 per gallon, the lowest since August, and it still has plenty of room to fall,” said Patrick De Haan, head of petroleum analysis at GasBuddy, on X Tuesday morning.

GasBuddy and AAA calculate gas prices slightly differently. GasBuddy calculates its average using data from customers using its app or discounts at local gas stations. AAA uses data from swipes by companies’ fleet credit cards at gas stations nationwide.

What can Americans expect for Thanksgiving travel?

With AAA predicting that 55.4 million Americans will travel at least 50 miles between Wednesday, November 22 and Sunday, November 26, and 49.1 million of them driving, “they certainly can be thankful for the decline in gasoline prices,” De Haan said. “Average gas prices have plummeted in all 50 states in the weeks ahead of Thanksgiving.”

De Haan expects the national average price of gas to drop even further by the time Americans start to travel en masse. He forecasts $3.25 per gallon, saving Americans $573 million during holiday travel compared to last year.

Even so, that’s still the fourth-highest Thanksgiving pump price since 2013, GasBuddy data show. The top three Thanksgiving prices were $3.56 in 2022, $3.39 in 2021 and $3.28 in 2013.

The lowest Thanksgiving gas prices were $2.05 in 2015, $2.11 in 2020 and $2.13 in 2016, GasBuddy said.

Why are gas prices falling?

The drop in gas prices is partly seasonal and partly due to lower oil prices, experts say. Gas is refined from oil, so the cost of crude determines about half the price of a gallon of gasoline.

Fall also brings a less expensive winter-blend gas that’s formulated to help engines run in the cold. The switch to winter blend alone knocks off several cents per gallon, AAA says. In addition, people usually stay in more to avoid the cold, which means less driving.

Meantime, oil prices are hovering near the lowest levels since July amid growing concerns of weak global demand as economies in Europe and China show signs of sluggishness, said Craig Erlam, senior market analyst at broker OANDA.  Weak economies produce less, which means they use less oil and gas to make and move people and products.

Gas prices lead inflation lower: Inflation slowed faster than expected in October. Does that mean rate hikes are over?

Which states have the lowest gas prices?

According to AAA, states with the lowest average price for a gallon of regular unleaded are:

• Texas, $2.790

• Mississippi, $2.840

• Georgia, $2.841

• Louisiana, $2.911

• Oklahoma, $2.913

Which states have the highest gas prices?

According to AAA, the highest average gas prices are in:

• California, $5.059

• Hawaii, $4.737

• Washington, $4.496

• Nevada, $4.380

• Oregon, $4.190

Are there risks gas prices will shoot up again?

Yes. If the war between Israel and Hamas in the Middle East widens or Saudi Arabia maintains its production cuts, oil prices could spike and bring gas along for the ride, analysts said.

Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday.

This article originally appeared on USA TODAY: Gas prices are falling, giving Thanksgiving travel a boost