Just in time for Christmas, there is hope for motorists that gasoline prices nationally will test lows we haven't seen since mid-November. The national average has declined for over a week, falling to $3.218 as of midnight, just two cents away from the low reached on November 11, when prices nationally were $3.192/gallon.
Several GasBuddy analysts believe there is enough momentum to cause prices to drop below their previous low in the next two weeks, helped lower by a significant jump in gasoline supply as oil refineries draw down their oil inventories as the end of the year approaches. Refineries and oil player generally try to reduce their holdings towards the end of the year for tax purposes. As refineries run at high rates, they draw down the oil they hold, which is turned into finished products, such as gasoline, diesel, jet fuels, etc.
Eight states are starting this week seeing gasoline averages under $3/gal: Oklahoma, Missouri, Minnesota, Arkansas, Kansas, Nebraska, New Mexico, Montana, and Colorado. You'll notice all of these states falls in the nation's midsection, where supplies remain high leading to lower prices regionally.
Nationally, prices still remain below their year-ago levels but the spread has narrowed to just several cents. Overall, gasoline prices in 2013 will finish a dime or so lower than 2012, and the good news for motorists is that in initial forecasts for 2014, GasBuddy believes that prices will again (on a yearly average) be lower than 2013. This certainly doesn't mean 2014 won't feature a roller coaster ride, and that prices won't hit record highs, but when all the peaks and levels are averaged, 2014 will feature limited relief versus this year.