Gas prices hit cheapest December levels in 4 years as holiday travelers hit the road nationwide
National average falls to $2.89 per gallon
GasBuddy head of petroleum analysis Patrick De Haan discusses the decline in gasoline prices across the country on 'Varney & Co.'
Gas prices have fallen in time for the holiday despite the increase in demand as a record number of people begin to hit the road.
The national average for a gallon of regular gasoline fell more than 4 cents to $2.89 last week, according to AAA. This marks the cheapest December at the pump since the end of 2020, according to data from AAA.
Gas Prices - National Average: $2.89
AAA characterized the year as "stable" for prices given that there haven't been any sharp spikes.
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Andy Lipow, president of Lipow Oil Associates, said the consumer is benefiting from "significant oversupply of crude oil driving prices below $60 per barrel" which is subsequently driving retail gasoline prices lower.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| USO | UNITED STATES OIL FUND - USD ACC | 67.19 | -0.79 | -1.16% |
| BNO | UNITED STATES BRENT OIL FUND - USD ACC | 27.58 | -0.33 | -1.18% |
West Texas Intermediate (WTI) crude oil, the U.S. benchmark, is trading around $56.55 per barrel, and Brent Crude, the international benchmark, is near $59.82 per barrel intraday on Friday.
The states with the cheapest gas include Oklahoma $2.34, Arkansas $2.46, Iowa $2.47, Colorado $2.49 and Wisconsin $2.51.
The states with the highest prices include Hawaii $4.43, California $4.33, Washington $3.96, Alaska $3.59, and Oregon $3.57.
Keeping crude oil prices low is key given that it typically accounts for around half, if not more, of the overall pump cost, depending on market conditions.
Customer Jann Gregg of Schenectady pumps gas at the GasWay Xpress Mart at 1120 Erie Blvd. pump gas on Wednesday, Dec. 3, 2025, in Schenectady, N.Y. (Lori Van Buren/Albany Times Union via Getty Images / Getty Images)
Lipow credited this surplus to a "near record production out of the United States, Canada, Brazil, Argentina, and Guyana" all while the Organization of the Petroleum Exporting Countries (OPEC) and its allies, have been restoring their voluntary production cuts enacted several years ago.
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OPEC+ is a coalition of oil-producing countries that work together to control oil supply and influence prices.
"In fact, these lower prices have forced OPEC+ to rethink their strategy, and they have halted the return of additional barrels to the market beginning January 2026," Lipow said, adding the prices could have been even lower if China didn't buy price discounted oil from Russia, Iran and Venezuela to stock their strategic petroleum reserves.
A morning commuter rides a bicycle past a gas station price sign on West Third Street in foggy rain on November 21, 2025, in Bloomington, Indiana. (Jeremy Hogan/Getty Images / Getty Images)
However, this surplus of supply, along with the lower prices, has given the Trump Administration the ability to take a more confrontational policy with Venezuela.
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Essentially, the market can absorb the loss of Venezuelan oil right now without a risk of a price spike, Lipow explained.
A gas pumping nozzle is seen at a Valero gas station on June 30, 2025 in Austin, Texas. (Brandon Bell/Getty Images / Getty Images)
Gas prices are also projected to continue their decline as the price of crude oil remains low.
EIA's November Short-Term Energy Outlook projected that the price of Brent Crude oil will decline from $69 a barrel in 2025 to $55 a barrel next year. That would be well below the $81 per barrel that prevailed in 2024.
Retail gas prices are projected hover around $3 a gallon in 2026, according to the report.