U.S. Gas Prices Remain Down 1:06
(CNN) -- In what appears to be a treat for U.S. consumers this holiday season, gas prices fell for 61 consecutive days, after coming dangerously close to $4 a gallon in September.
The average price of a gallon of regular gas stood at $3.25 on Tuesday, according to the American Automobile Association (AAA). That's five cents less than a week ago and 26 cents less than a month ago.
Fuel prices have fallen every day after peaking on Sept. 18, AAA data shows. This streak represents a win for consumers, saving them money just in time for the holiday shopping season.
Americans are particularly sensitive to price changes at the pump, as they are highly visible and largely unavoidable.
"Gas prices are very straightforward. This is a clear tailwind in favor of consumer spending," said Tom Kloza, global head of energy analysis at the Oil Price Information Service.
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Millions of Americans hitting the road on Thanksgiving Day were surprised by the cheapest gas price for the holidays since 2020, when many people were unable to take advantage of the season due to the COVID-19 pandemic.
However, it's normal for gas prices to drop once the summer season is over because demand drops. Last year saw an even longer streak of 98 days of falling prices after gasoline hit a record high of $5.02 a gallon in June 2022. That was the second-longest streak on record since 2005.
But what is significant today is the magnitude of the drop and how it occurs in the face of a series of threats that suggested the opposite could happen.
Gasoline prices are now down 63 cents from $3.88 in September. This, despite the war between Israel and Hamas, which raised the specter of a regional conflict that could disrupt the flow of oil from the Strait of Hormuz or disrupt Iran's supply. And that's not to mention Russia's protracted war against Ukraine and its aggressive supply cuts along with Saudi Arabia.
However, oil prices, the main driver of retail prices, have also fallen by about 20% since briefly reaching $28 a barrel on Sept. 95. U.S. crude fell nearly 1% on Monday to close at $74.86 a barrel before rebounding to nearly $76 on Tuesday.
Fears of supply disruptions in the Middle East have not been confirmed, forcing the oil market to focus on signs of oversupply and weak demand in China.
Oil continued to fall last week after OPEC and its allies, known as OPEC+, postponed a meeting until Nov. 30 without giving reasons. The delay is seen as a sign of disagreement within the producer group on how to proceed.
"This is a decisive OPEC+ meeting," Kloza said. "This meeting reminds me a lot of the one in November 2014, during which the Saudis turned on the taps and created one of the biggest price drops of our lifetimes, apart from the one that took place during Covid-19."
Like other analysts, Kloza expects OPEC+ to renew existing quotas until the first quarter of 2024. But some argue that Saudi Arabia will push for even deeper production cuts to offset the increase in non-OPEC supply, including record U.S. output.
No matter the reason, gas prices are falling across the country.
There are currently 15 states that pay an average of $3 or less for a gallon of gas, including Wisconsin, Ohio and South Carolina, according to AAA.
But, as Kloza points out, the average price can be misleading because it's inflated by states with high-cost gas like Hawaii, Washington, and California (though even in California prices have fallen 43 cents over the past month, to $4.88 a gallon).
The median price, which may give a better idea of what most of the country is actually paying, has fallen to $3.06 a gallon, according to OPIS. That's down from $3.40 a year ago. OPIS says the most common price is now $2,999.
There are now more than 20,000 gas stations selling gas at $2.75 a gallon or less, according to GasBuddy.
Kloza expects prices at the pump to continue to fall, at least for now.
"It's going to be very, very difficult for gas prices to go up in the next 60 days," Kloza said. "This period of fairly severe disinflation will likely continue until the end of the year."