Price of Gasoline Dropping, But No Return Yet To Trump Prices

There are extra good reasons why it's "the most wonderful time of the year," including the relatively cheap price of gasoline.

Gas prices drop this time of year because fewer people drive long distances as winter comes along and oil refineries convert to a "winterized" process that provides cheaper gasoline.

Cheaper, yes, but are we headed for gas at less than two dollars a gallon, as were seen during President Trump's first term of office?

Prices don't appear to be dropping that far any time before President-Elect Trump returns to the White House next month.

But this year there are a couple of additional economic factors lowering gas prices, and money-saving surprises are always welcome this time of year, according to GasBuddy's Head of Petroleum Analysis, Patrick DeHaan.

He lists two reasons as a weakening economy that's anticipating lower interest rates thanks to the Federal Reserve, and weakening petroleum demand that's resulted in lower prices for barrels of crude oil.

Because gasoline is made through the refining of oil, the price of crude moves almost simultaneously with the cost of gasoline.

"A lot of this is simply seasonal. Americans driving less and less as temperatures get progressively colder, people tend to stay at home more during the winter, so gasoline, as a result, is lower in price," but there are also non-seasonal aspects this Christmas season.

"The global economy has been slowing down a bit, that's meant less demand in developing countries like China, and even here in the United States, in addition to the weaker seasonal demand.

"So even as the [Federal Reserve] begins to lower interest rates in an effort to cool down the economy, this has an effect of lowering demand -- all of that is pushing down oil prices and gas prices," De Haan told Newsradio 740 KTRH.

The cost of a gallon is still variable in The Lone Star State -- see the chart here to appreciate the differences among locations.

Of course, all good things must end: "Don't get too used too these prices, now, they could last another 4 to 6 weeks but by February I do expect to see prices rising seasonally for many of the opposite reasons.

"On average, prices could bottom out anytime in December or typically in January, when demand is at its lowest."

Still, because of the extra gas-price-dropping reasons, barring any geopolitical event or a disaster of some kind, even when prices are headed back up, we may still see gasoline at a lower-than-expected price for some time to come.


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