U.S. Gasoline Prices Lower Ahead of Labor Day

By Rahul Paswan

(Reuters) – U.S. gasoline prices were substantially lower than last year heading into the weekend of the Labor Day federal holiday on Monday, which marks the end of the U.S. summer driving season, the U.S. Energy Information Administration (EIA) stated on Thursday.

The retail price for regular gasoline in the U.S. averaged $3.31 per gallon on August 26, down about 13% from a year earlier.

Importance of the Data

The EIA indicated that its estimates show demand is greater heading into the Labor Day weekend this year compared to last. Its most recent data covering the week ended August 23 showed U.S. gasoline demand of 9.3 million barrels a day, the highest for August since 2022.

However, as the summer driving season concludes, it expects weaker demand than last year, which should help maintain lower average gasoline prices in the coming months.

Context

The decline in pump prices can be attributed to the weak growth in global and U.S. petroleum product demand, continued crude oil production growth from non-OPEC+ countries, and China’s slowing economy, according to the EIA report.

A series of refinery outages in the U.S. Midwest caused regional gasoline prices to spike by more than 20% above the national average from July 22 to August 5.

By the Numbers

Gasoline in U.S. inventories currently sits at 221 million barrels, approximately 3% higher than this time last year, according to EIA data.

The Brent crude oil price on August 26, 2024, fell 4% from the same time last year, as reported by the EIA. The EIA estimated that crude prices contributed 55% to the price of gasoline as of June.