Gasoline prices could drop below $3 a gallon before the election

Top analysts now see the national average falling to $3 a gallon — or less — in the coming weeks, potentially removing a key source of voter anxiety.

Patrick De Haan, head of oil analysis at GasBuddy, said an X fast on Saturday that US gas prices are now $3.187 per gallon.

“We continue to move towards the $2.99 ​​mark, which we expect to happen in October!” he wrote.

While the U.S. average remains above $3, large parts of the country are already below that threshold, with GasBuddy saying Delaware and Iowa became the 16th and 17th states to join the club on Saturday.

Separate data from AAA shows the national average for gas prices is $3.217 per gallon, down 17 percent from a year ago. Most states in the South and parts of the Midwest already pay less than $3, including key battleground states Georgia, North Carolina and Wisconsin. But in Nevada, another critical state, prices are $4 a gallon.

Lower gas prices have been a major factor in cooling inflation this year. The latest consumer price index report showed an annual increase of 2.5 percent last month, the fifth consecutive decline in the inflation rate and the smallest increase since February 2021.

Meanwhile, Brent crude oil prices are down 24% from a year ago and now stand at around $72 a barrel. So US oil production continues to hit new records, while other crude producers such as Guyana, Brazil and Canada are also increasing.

The flow of global supply is too much for OPEC+ to offset as it tries to extend its output cap. At the same time, China’s slowing economy means there is less demand for crude oil, prompting Wall Street analysts to predict oil will head toward $60 a barrel.

“We may be going into Election Day with gas near $3 a gallon, which eliminates a problem that Democrats were worried about a few months ago,” energy guru Daniel Yergin, vice president of S&P Global, told CNBC on Friday.

But he added that geopolitical concerns, such as tensions in the Middle East, still hang over oil prices.

Despite falling gas prices, polls still show voters trust Republican nominee Donald Trump more on the economy than his Democratic rival, Kamala Harris.

Lower inflationary pressure is helping improve consumer sentiment. The latest reading from the University of Michigan rose to 69.0 in September from 67.9 in August.

The survey also found that inflation expectations for the coming year fell for the fourth consecutive month, falling to 2.7%, the lowest since December 2020 and in the pre-pandemic range of 2.3%-3.0%.

“Sentiment is now about 40 percent above the June 2022 low, although consumers remain vigilant as the looming election continues to generate substantial uncertainty,” Joanne Hsu, the university’s director of Surveys of Consumers, said in a statement. “A growing share of both Republicans and Democrats now anticipate a Harris victory.”