WASHINGTON -- U.S. motorists could seemuch lower retail gasoline prices by Thanksgiving. Monday's national average price for a gallon of regular unleaded gasoline was $3.67, which is 12 cents less expensive than one week ago and 15 cents less expensive than one month ago, according to AAA's latest Fuel Gauge Report. This is the largest national week-over-week decline since 2008.
Retail prices plummeted during the second-half of that year, as the U.S. economy collapsed, and prices fell from the all-time peak of $4.11 per gallon on July 17 to $1.62 to end the year. While the national average has been the highest on record each calendar day for more than two months, the gap between the price this year and the previous record continues to narrow.
Last Monday, the national average exceeded the previous record for that day, set in 2011, by 34 cents. On Oct. 22, that gap has narrowed to 21 cents.
AAA said that it expects that gasoline prices across the country will continue to drop leading up to Election Day (Nov. 6) and will move even lower approaching the end of the year, barring any unforeseen forces. Wholesale (RBOB) gasoline futures have dropped nearly 30 cents since the start of October, and retail prices, which typically lag wholesale price declines, are now beginning to reflect this drop. In 2011 the national average price on Nov. 6 was $3.41 and the price on Thanksgiving was $3.32
AAA said that it expects that the national average is likely to be between $3.40 and $3.50 when American's head to the polls in just over two weeks and to be between $3.25 and $3.40 by Thanksgiving.
For the last several months changes in the national average have often obscured regional volatility, as prices in some states have risen dramatically even as prices in others have fallen. Over the last week, however, the decline in the national average has reflected lower pump prices in every state except Alaska and Utah, as regional supply concerns begin to diminish and demand continues to weaken nationwide. Prices in 16 states are more than 10 cents lower on the week and prices in four Midwestern states (Wisconsin, Indiana, Ohio and Michigan) are more than 20 cents lower.
In a separate report, Gasbuddy.com's Patrick DeHaan said the national average yesterday took its biggest weekly decline in over a year, according to GasBuddy data. The decrease of 10.1 cents per gallon was the largest week-on-week decrease since late May 2011, when prices decreased 10.4 cents per gallon in one week. Last week's drop was also one of the largest since the 2008 recession saw prices drop week after week by nearly 30 cents per gallon.
"While the national average may continue to drop for several weeks, don't believe that prices will drop significantly further," he said. "I expect that by Thanksgiving, the national average will be close to $3.35 per gallon, and while that sounds nice compared to prices earlier this year, it still is far higher than past years."
Ben Brockwell, director of data, pricing and information services with Oil Prices Information Service, also sees prices falling, although not as steeply, to below $3.50 a gallon. Brockwell told CNNMoney that wholesale prices have dropped as much as 30 cents a gallon in some markets. By comparison, the national average has fallen 12 cents over the past week. By that measure, Brockwell said the recent decline still has room to run.