Travelers get a bit of break over the Thanksgiving holiday, since gas prices dropped by 16 cents in the past week, bringing the average price of a gallon in the U.S. to $3.61.
That's well below the summer peak of over $5 for a regular gallon of gas, although as of Wednesday, prices are still 21 cents higher than a year ago, according to the American Automobile Association (AAA).
It's also the highest national average during Thanksgiving since 2000, when AAA first started tracking average gas prices in the U.S.
"Thanksgiving [gas prices] will be about a dollar more per gallon than in pre-pandemic 2019. However, we can be thankful that gas prices are moving in the right direction for now," said AAA spokesperson Andrew Gross.
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Here's a look at the average price for a regular gallon of gas in every U.S. state.
Gas prices are highest in western states, where they largely sit above $4 per gallon. At $5.16 per gallon, California has the second-highest average in the country, after Hawaii, where a gallon costs $5.20.
Prices are cheapest in the South, where a gallon of gas is closer to $3. In Texas, a gallon costs $2.95, which makes it the cheapest state to pump gas. It's also the only state where gas is below $3.
Gas prices tend to vary by region due to differences in state and local taxes, distance from supply and retail competition.
Why gas prices are going down
It's no accident that gas prices are falling. The main reason: Demand for oil has dropped off amid concerns of a global economic slowdown that's been exacerbated by a crackdown on Covid-19 cases in China.
Meanwhile, domestic oil production is still about 10% below February 2020, the month before production was slashed in response to the pandemic, Bloomberg reports.
Despite the shortfall in supply, easing demand for oil is still likely to keep prices stable beyond the holidays.
Because of this, retail gas prices are expected to remain "relatively flat" in 2023, according to the latest forecast by the U.S. Energy Information Administration. The agency projects that a gallon of gas will cost an average of $3.60 in February 2023.
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