Gas prices have fallen in time for the holiday despite the increase in demand as a record number of people begin to hit the road.
The national average for a gallon of regular gasoline fell more than 4 cents to $2.89 last week, according to AAA. This marks the cheapest December at the pump since the end of 2020, according to data from AAA.
AAA characterized the year as "stable" for prices given that there haven't been any sharp spikes.
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Andy Lipow, president of Lipow Oil Associates, said the consumer is benefiting from "significant oversupply of crude oil driving prices below $60 per barrel" which is subsequently driving retail gasoline prices lower.
West Texas Intermediate (WTI) crude oil, the U.S. benchmark, is trading around $56.55 per barrel, and Brent Crude, the international benchmark, is near $59.82 per barrel intraday on Friday.
The states with the cheapest gas include Oklahoma $2.34, Arkansas $2.46, Iowa $2.47, Colorado $2.49 and Wisconsin $2.51.
The states with the highest prices include Hawaii $4.43, California $4.33, Washington $3.96, Alaska $3.59, and Oregon $3.57.
Keeping crude oil prices low is key given that it typically accounts for around half, if not more, of the overall pump cost, depending on market conditions.
Lipow credited this surplus to a "near record production out of the United States, Canada, Brazil, Argentina, and Guyana" all while the Organization of the Petroleum Exporting Countries (OPEC) and its allies, have been restoring their voluntary production cuts enacted several years ago.
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OPEC+ is a coalition of oil-producing countries that work together to control oil supply and influence prices.
"In fact, these lower prices have forced OPEC+ to rethink their strategy, and they have halted the return of additional barrels to the market beginning January 2026," Lipow said, adding the prices could have been even lower if China didn't buy price discounted oil from Russia, Iran and Venezuela to stock their strategic petroleum reserves.
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However, this surplus of supply, along with the lower prices, has given the Trump Administration the ability to take a more confrontational policy with Venezuela.
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Essentially, the market can absorb the loss of Venezuelan oil right now without a risk of a price spike, Lipow explained.
Gas prices are also projected to continue their decline as the price of crude oil remains low.
EIA's November Short-Term Energy Outlook projected that the price of Brent Crude oil will decline from $69 a barrel in 2025 to $55 a barrel next year. That would be well below the $81 per barrel that prevailed in 2024.
Retail gas prices are projected hover around $3 a gallon in 2026, according to the report.
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