Average Gas Price Heads to $3, Helps Holiday Sales

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Gas Prices Fall

The cost of gas is fast falling to the point it may be helping holiday sales.

The average price at the pump was $3.50 as of Wednesday, said AAA, and it could drop below $3 by Christmas, said GasBuddy.  The lower prices may have contributed to strong holiday sales over Thanksgiving weekend, reported The Washington Post.

A fill up at the pump may soon return to the neighborhood of $50 versus $80.

Gas prices have dropped for three straight weeks, falling to the price just prior to the Russian invasion of Ukraine, reported AAA.  Diesel prices also recently fell in all but three states.

The prices reflect lower demand as consumers cut back due to inflation and in anticipation of recession in the US and abroad. COVID restrictions in China also played a role.  Also, some key US oil refineries have resumed production after being out of commission.

While the low prices may help holiday sales this year, the future of gas prices is still murky, and depends on current negotiations on oil with Russia, and oil production levels set by OPEC Plus (which meets December 4 to determine levels for the coming months).

Still if gas prices stay low for six months, it could help resolve inflation and signal to the Fed that it can ease off rate hikes, said The Washington Post, quoting an owner of hundreds of gas stations plus an oil refinery, John Catsimatidis.

Source: The Washington Post, GasBuddy, AAA

 

Photo: Toyota of Orlando

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