• Memorial Day gas prices are expected to drop to their lowest level since 2021, averaging around $3.08 per gallon. This marked event where gas prices drop is encouraging for holiday travelers.
• Millions more Americans plan to travel this holiday weekend thanks to lower fuel costs and the significant drop in gas prices.
• Increased oil production and refinery closures impact the gap between crude oil and gasoline prices, though gas prices drop significantly.

This Memorial Day weekend, nearly 40 million Americans will travel by car. They will find a pleasant surprise: low gas prices. The national average price per gallon should hit $3.08, according to GasBuddy. This price marks the cheapest Memorial Day gas in two years. Last year, prices averaged $3.58. In 2022, drivers paid even more, with gas hitting $4.60 per gallon on Memorial Day. This drop makes filling up a tank easier on the wallet. Drivers can enjoy lower costs as they hit the road.

National Average Gas Prices Drop Below $3.10 and Could Fall Further

GasBuddy’s head of petroleum analysis, Patrick DeHaan, says this trend helps consumers. He predicts prices could fall below $3.00 a gallon later this summer if conditions remain favorable. On an inflation-adjusted basis, gas prices for Memorial Day will be the cheapest since 2003, excluding the pandemic years. This means Americans spend less time working to afford gas. Lower prices give families more money to spend elsewhere. It’s a significant relief amid ongoing economic concerns, such as trade tensions and fears of slower growth as gas prices drop.

Millions More Drivers Will Travel, Taking Advantage of Lower Fuel Costs

AAA forecasts that 39.4 million people will drive over Memorial Day weekend. This number shows a 3% increase from last year and nearly 5% more than 2019, before the pandemic. Lower gas prices encourage more travel and boost tourism. They also ease the burden on household budgets. According to energy consultant Bob McNally, lower gas prices feel like a tax cut for many Americans. People notice gas prices every time they drive, even if they don’t fill up that day. The effect of when gas prices drop influences how consumers feel about their finances and the economy.

Falling Gas Prices Have Already Helped Reduce Inflation in Recent Months

Gas price drops contributed to better-than-expected inflation reports in March and April. The cost of living feels less heavy when fuel prices fall. GasBuddy projects that summer gas prices will average $3.02 per gallon from Memorial Day through Labor Day. This prediction gives travelers and families confidence to plan summer activities without worrying about fuel costs. Lower energy prices also encourage spending in other parts of the economy, supporting broader growth.

Oil Prices Declined Sharply After Last Year’s Record Highs Due to Increased Production

Oil prices surged in 2022 following Russia’s invasion of Ukraine. Since then, US oil prices dropped by about 20%. Analysts link this drop partly to Saudi Arabia and OPEC’s decision to boost production. President Trump played a role in this increase. He promised to increase domestic oil supply and urged OPEC to produce more oil. Trump made this point in a notable speech at the Davos forum soon after taking office. His push helped ease supply concerns, contributing to the drop in oil prices.

Trump’s Lighter Pressure on Saudi Arabia Helped Keep Oil Supplies Steady

Bob McNally, who advised President George W. Bush on energy, says Trump used a softer approach with Saudi Arabia this time. Trump avoided harsh pressure on the kingdom compared to his aggressive stance toward Walmart, China, and the Federal Reserve. This more diplomatic style helped maintain steady oil supplies. McNally credits Trump for being “more deft” in dealing with OPEC to boost oil production.

Trade War Fears and Tariffs Also Weighed on Oil Prices Earlier This Year

Energy prices also reflect worries about Trump’s tariffs. These tariffs sparked fears of a global recession. In early April, oil prices hit four-year lows as tariff fears peaked. After Trump paused many tariffs, crude oil prices bounced back somewhat. However, uncertainty around trade policies continues to influence oil markets.

Trump Did Not Follow Biden’s Sanctions on Russia’s Energy Sector, Affecting Prices

Another reason oil prices stayed low is Trump’s decision not to continue Biden’s harsh sanctions on Russia’s energy exports. This choice allowed more Russian oil to remain on the market, increasing supply. The higher supply helped keep oil prices down despite geopolitical tensions.

Crude Oil Prices Fell Due to Economic Concerns and More Oil Supply

McNally says pessimism about the economy and increased oil production by Saudi Arabia and OPEC drove crude oil prices lower. This drop shows the complex balance between supply and demand in global markets.

Gasoline Prices Remain Higher than Oil Prices Due to Refinery Closures

Gas prices did not fall as much as crude oil. Refinery shutdowns across the US caused a gap between crude prices and gas prices. Many refineries closed because they expect less gasoline demand. The rise of electric vehicles reduces fuel consumption. Lower refinery output means gas prices stay higher even when crude oil is cheaper despite the fact that gas prices drop elsewhere.