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By Giulia Carbonaro
Senior Reporter
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Prices at the pump dropped to a three-year low on Labor Day weekend and are expected to continue falling through November, reaching lows that would please drivers and favor Democratic nominee Kamala Harris in the presidential election.
After reaching a peak of $3.69 per gallon in April, gas prices have been sliding down steadily in the past few months, making it a good summer for motorists. The national average for a gallon of regular was $3.333 as of September 1, down 15 cents from a month earlier and more than 50 cents from a year earlier, according to the latest data from the American Automobile Association (AAA).
The price per gallon ranged from a maximum of $4.645 in California to a minimum of $2.862 in Mississippi.
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On Sunday night, Patrick De Haan, head of petroleum analysis at fuel savings platform GasBuddy, wrote on X that the national average price of gas had fallen to $3.297 per gallon, "the lowest level since March and the lowest summer level since 2021." Last week, De Haan told Newsweek that he expected gas prices to reach such record low over the weekend, just in time for many Americans' last road trip of the summer.
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"We're exiting summer and with back to school happening, Americans aren't road-tripping as much," De Haan told Newsweek. "Demand has been weak for most of the summer as well, and we really haven't seen much major refining disruption over the summer, so prices have been trending lower for several weeks, which is typically the case barring hurricanes or outside factors."
Experts, including De Haan, expect gas prices to continue dropping in the U.S. in the coming weeks, as U.S. refineries seem to be handling heat waves better than they did last year—when soaring temperatures forced Texas refineries to reduce operations—and this year's hurricane season has so far been quieter than expected.
In 2023, Hurricane Idalia forced Chevron to evacuate staff from three of its oil platforms in the Gulf of Mexico, temporarily shutting down production and contributing to higher gas prices at the pump.
"Fear of shortages in 2022 and 2023 conspired to see wholesale gasoline fetch margins of $25-$40/barrel for U.S. refineries—essentially adding $1/gal to the gasoline price before the product gets shipped downstream to stations," Tom Kloza, global head of energy analysis at the Oil Price Information Service, told Newsweek.
"Right now, refiner margins for gasoline are at about $5/barrel in the largest market—the Texas and Louisiana Gulf Coast. At the moment, gasoline can't trade much lower unless crude oil costs drop."
"I do expect the national average to continue to drop, subject to hurricane season, which could temporarily pause the drop, or the Middle East, or a few other factors. As air temperatures start to cool, Americans get outside less and so demand for gasoline drops," De Haan said. "In addition, the changeover to cheaper winter gasoline is just two weeks away."
Demand for gas naturally weans off over fall and winter as people are on the road less. Starting from mid-September, gas stations transition to their winter blend gas, which is less expensive to produce and helps cut prices across the board.
Could Harris Take Advantage of Lower Gas Prices?
While presidents and their administrations have very little control over gas prices—which can be affected by major global events, decisions on oil production made in third countries such as Iran, and extreme weather events—they're often blamed when gas prices rise.
When gas prices rose in 2022, reaching a peak of $5.02 on average nationwide, Republicans—including Donald Trump—were quick to point the finger at Joe Biden.
Americans burdened by the higher cost of living following the pandemic also appeared to blame the president for it: a survey ran by Redfield & Wilton Strategies for Newsweek on January 18, 2024, found that 55 percent of Americans said they had seen a price rise in their local area and believed it was "primarily caused" by government mismanagement.
Being credited for lower gas prices, on the other hand, is a little bit harder. The same poll found that 36 percent of Americans thought Biden had nothing to do with prices dropping over the past year, while 24 percent said he was "slightly" responsible, 23 percent said he was "fairly" and 17 percent said "significantly."
Despite lower inflation, economic anxiety is still rampant among Americans, as shown by recent polls. Forty-one percent of Americans polled by Redfield & Wilton Strategies on behalf of Newsweek last month thought that the U.S. economy was still heading in the wrong direction. A majority of 93 percent of these blamed Biden for it, while 88 percent thought Harris was also responsible to some degree.
That means that Harris, despite having markedly improved her popularity since she announced her bid for the presidency, has very little room for error when it comes to gas prices. Especially as Trump continues to promote a narrative that sees the Biden-Harris administration as single-handedly responsible for rising inflation in the post-pandemic recovery.
In an ad released last month, Trump blamed Bidenomics for the "alarming spike in inflation" in recent years and gas prices reaching "an all-time high" under the Biden-Harris administration. "Thanks to Bidenomics, two-thirds of Americans are struggling to make ends meet, and Kamala Harris is to blame," a post published by Trump's 2024 campaign team on its website reads.
In the next weeks through November, Trump is likely to continue seizing on Americans' negative feelings about the economy to talk down the U.S. economy and blame Harris, as well as Biden, for it.
Newsweek contacted Trump's and Harris' 2024 campaign teams for comment by email on Monday morning, outside of standard working hours.
Given the circumstances, could the vice president take advantage of dropping prices at the pump and turn it into a strength in November?
"I fully expect politicians to both try to blame each other for high prices and to try to take credit for prices when they fall. It could help the incumbent party when prices fall as they generally always do into the fall," De Haan said.
Kloza told Newsweek that whoever wins the presidency in November "will be rewarded with significant energy deflation from November 2024 through December 2025."
"I expect gasoline prices to fall but we may see slightly higher prices for diesel. Crude values are contingent upon OPEC+ policies—most of the calculus suggests we'll see supply outpace demand by 700,000 b/d or even 1.2-million b/d in 2025 so the crude oil market looks to be sloppy unless there is an exogenous impact, such as tighter sanctions on Iran, sustained loss of Libyan production," he added. "But generally it is tough to make a very strong case for high priced oil."
While presidents have no direct control over gas prices, Denton Cinquegrana, chief oil analyst at Oil Price Information Service (OPIS), told Newsweek that "they would be silly to not take credit for it."
He added: "It can certainly be a help for the election if prices are at or below $3/gal."
The vice president is already claiming lower gas prices as a victory, celebrating it as an achievement of the Biden-Harris administration. On Friday, she wrote on X: "inflation is down to its lowest level in over three years. Gas prices are down nearly 50 cents compared to Labor Day last year."
It might be a little too early to celebrate: with hurricane season still ongoing, there's always the risk of a major hurricane making landfall in the U.S. and disrupting oil production.
But a coincidence along the equators of two climate phenomena rarely seen together, the Pacific Niña and the Atlantic Niña, as reported by experts Annalisa Bracco and Zachary Handlos for The Conversation, is likely to mitigate this risk and discourage the formation of tropical storms and hurricanes in the Atlantic.
The issue of gas prices is certainly one concerning California Governor Gavin Newsom, a Democrat, who's been fighting for legislation that would cut prices at the pump in what's the most expensive state in the nation.
On Saturday, Newsom called the legislature into a special session to address gas prices just as it prepared to wrap up its legislative year, extending the clock until November 10 for lawmakers to decide on an energy package the governor only unveiled last week and that Democrats pushed back on saying they needed more time to review it.
Among the energy-related bills that Newsom is trying to persuade the state legislature to vote for, there's one that would regulate refinery maintenance so as to avoid supply problems that are likely to send prices skyrocketing.
"It should be common sense for gas refineries to plan ahead and backfill supplies when they go down for maintenance to avoid price spikes. But these price spikes are actually profit spikes for Big Oil, and they're using the same old scare tactics to maintain the status quo," Newsom said in a statement.
Newsweek contacted Newsom's office for comment by email on Monday morning, outside of standard working hours.
What's clear is that gas prices will play a crucial role in the incoming election. As in the words of Cinquegrana: "There are three things that move the needle in this country: politics, religion and gas prices. There are few things that Americans such as more than low gas prices, maybe bacon?"
Update, 9/2/2024 9:35 a.m. ET: This article has been updated with a comment from Patrick De Haan.
Update, 9/3/2024 11:35 a.m. ET: This article has been updated with comments from Tom Kloza and Denton Cinquegrana.
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