Gas prices are in 'glacial' decline. Here's why. - Yahoo Finance

Gas prices are on a downtrend trend, falling below a national average of $3.50 per gallon for the first time since February of this year.

The average price of gasoline sat at $3.45 per gallon on Thursday, down $0.36, or 9% from a month ago, according to data provided by AAA.

Even Californians, who pay the most out of any state, have seen their driving fuel cost decrease by $0.85 over the last 30 days to a state average of $5.21 per gallon.

The move downward is expected to continue into the winter months.

“I expect that gasoline prices will continue to fall another $0.05 to $0.10 over the next week," Andy Lipow, president of Lipow Oil Associates, told Yahoo Finance.

"Seasonally, demand is falling at the same time that refiners are returning from maintenance and boosting supply,” he said, referring to refineries that were temporarily offline for maintenance work, unable to produce gasoline.

The prices are displayed over the grades of gasoline available at the Little America Sinclair Saturday, Oct. 7, 2023, in Cheyenne, Wyo. (David Zalubowski/AP Photo) (ASSOCIATED PRESS)

The declines come in spite of recent volatility in the oil markets as crude futures trade in the low to mid $80s range.

“We expect gas prices to maintain this steady, if glacial, daily decline until the end of the year,” Andrew Gross, spokesperson for AAA, told Yahoo Finance. “But we need to keep an eye on the oil market, which will likely react negatively if the war between Hamas and Israel widens.”

Crude futures spiked in the aftermath of the surprise attack on Israel by Hamas. They have since then lowered on concerns over demand and a supply squeeze stemming from OPEC+ output cuts and unilateral reductions from Saudi Arabia.

“As oil prices move, so will gas prices because oil costs account for about 50% of what we pay at the pump" said AAA's Gross.

"They [gas prices] will start to rise again with the return of summer blend gas as well as longer days and better weather, which encourages people to hit the road," he added.

Ines Ferre is a Senior Business Reporter for Yahoo Finance. Follow her on Twitter at @ines_ferre.

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