Gas prices dropped by more than they have all year as after-holiday demand dips
Gas prices continue to drop as demand evens out after the holiday weekend. (iStock)
Consumers are paying less at the pump this week as average gas prices dropped by five cents, a AAA report found. The average gallon of gas now costs $3.56.
This week’s drop was the largest the country has seen this year. Demand dropped this past week — largely due to the after-Memorial Day lull — contributing to lowering gas prices.
"Gas prices will likely keep up this slow sag now that we are past the Memorial Day travel weekend and more locations, east of the Rockies, will be selling gas below $3 a gallon," AAA spokesperson Andrew Gross said.
Oil prices also remain low, causing a dip in prices. Demand fell from 9.31 barrels per day to 9.14 last week, Energy Information Administration (EIA) data showed.
Early storm seasons may be here sooner than later, though. One bad storm could seriously impact oil prices and cause gas prices to jump up.
"It’s time to start weather watching as the Atlantic Hurricane Season begins June 1st, and forecasters predict it will be very active," Gross said. "A storm impacting the Gulf Coast oil production and refining centers could push prices temporarily higher, so stay tuned."
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MONTHLY CAR PAYMENTS DECLINE DESPITE RISING AUTO INSURANCE RATES
States with the highest and lowest gas prices
The list of states with the least and most expensive gas stations has shifted this week. The least expensive gas markets include many states in the South:
- Mississippi ($3.03)
- Arkansas ($3.06)
- Oklahoma ($3.07)
- Kansas ($3.10)
- Texas ($3.13)
- Louisiana ($3.13)
- Tennessee ($3.13)
- Missouri ($3.16)
- South Carolina ($3.18)
- Alabama ($3.20)
America’s West coast faces some of the highest gas prices, but a few other states across the country also make the list.
- California ($5.09)
- Hawaii ($4.78)
- Washington ($4.53)
- Oregon ($4.28)
- Nevada ($4.27)
- Alaska ($4.24)
- Illinois ($3.99)
- Arizona ($3.81)
- Pennsylvania ($3.75)
- Idaho ($3.73)
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NEW VEHICLES ARE BECOMING MORE AFFORDABLE AS VEHICLE LOAN INTEREST RATES DECLINE
New vehicle sales are up, but not as much as used vehicles
Car buying is becoming a little less expensive, giving life back to the market. New vehicle sales are up 5% year over year, Cox Automotive’s May Auto Market Report found. Used cars are doing even better, their sales rising 8% year-over-year as of May.
Buyers appear to be choosing used vehicles over new, mainly because prices are dropping more for used cars than they are for new. Vehicles released in 2021 decreased by 0.6% in wholesale price and 0.4% in retail price in the last week of May.
Used car prices are stabilizing and coming down from their pandemic highs. The Consumer Price Index (CPI) for April showed a 0.4% decrease in the used car index, a 1.4% decrease from last month.
New vehicles are also going down in price, just not as quickly as older cars. The new vehicle index declined by just 0.1% in April’s CPI.
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