Gas prices continue to slide below $3, hitting fresh four-year low ahead of Christmas

Gasoline prices hit a new four-year low ahead of the Christmas travel week.

As of Tuesday, the national average at the pump was $2.90, roughly $0.12 less than a year ago, according to AAA data, marking a third consecutive week of declines.

The downward trend has been driven by US refineries completing maintenance and boosting output, along with falling crude prices.

“Just ahead of Christmas, the national average stands at its lowest level since March 12, 2021, delivering weekly savings of nearly $400 million compared to this time last year,” GasBuddy’s Patrick De Haan said on Monday.

GasBuddy data shows some stations in Texas, Colorado, and Oklahoma offering prices at $1.99 per gallon, a trend which could grow.

“Those sub-$2 per gallon numbers that have popped up are becoming more commonplace,” Tom Kloza, analyst for Gulf Oil, told Yahoo Finance. Kloza expects similar prices to appear at stations across six to 12 additional states.

“I think we’ll spend the next 60 days or so looking for a likely bottom,” said Kloza, adding that the weather will play a major role.

If the US experiences very cold temperatures, refiners will continue to make diesel, heating oil and kerosene, all of which produce gasoline as a byproduct. At the same time, cold and harsh conditions can reduce gasoline demand.

“Once the days start getting longer, we’ll see a gasoline futures’ rally as we generally do every year between Q4 and Q2.”

Additional oil production added this year by the Organization of the Petroleum Exporting Countries has put pressure on crude prices.

On Tuesday West Texas Intermediate (CL=F) futures touched $55 per barrel, their lowest level since 2021 as prices have fallen 22% year-to-date.

Brent (BZ=F), the international benchmark, has fallen 20% during the same period.

President Trump touted lower energy prices at a Mount Pocono Pennsylvania political rally last week, signaling that lower energy prices will help alleviate the cost of living.

“I have no higher priority than making America affordable again,” said Trump at a Pennsylvania rally on Dec 9.

“How would you like to have $1.99? You know, that’s — that’s the equivalent of a very major tax cut,” he added.

Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.

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