The Blubber

US gas prices dropped to a new six-month low of $3.31 per gallon on Thursday, down 50 cents from the same time last year, according to AAA.

In 10 states, including Texas, Kentucky, and Kansas, drivers are paying less than $3 a gallon on average. Andy Lipow, president of Lipow Oil Associates, predicts that within the next two weeks, another nine states will join the list of those with prices under $3.

Data from OPIS, which tracks prices at 130,000 gas stations nationwide, shows that nearly 41,000 stations—almost one in three—are already charging less than $3 per gallon for regular gas. At this time last year, fewer than 100 stations nationwide had prices below $3.

GasBuddy’s Patrick De Haan told CNN that by Thanksgiving, between 35 and 40 states could see prices drop below $3 a gallon.

“After more than two years of soaring gas prices due to factors like COVID-19 and Russia, prices are finally stabilizing,” said De Haan.

The rapid decline in gas prices is expected to ease financial pressure on consumers and help lower inflation. This could also give the Federal Reserve room to reduce interest rates, making borrowing cheaper for Americans.

If the trend continues, it could also benefit Vice President Kamala Harris in the upcoming November election, as voters assess which candidate is best for their wallets. Some economists believe gas prices will play a key role in voters' decisions, and lower prices could favor the current administration.

In battleground states, gas prices have dropped significantly compared to last year, with Arizona seeing an 88-cent decline, Nevada down 55 cents, and Georgia dropping by 49 cents.

'Panic and fear' at OPEC
Analysts told CNN that the trend of falling gas prices is likely to persist, despite OPEC+’s recent strategy shift.

The oil market is so weak that even intervention from OPEC+ hasn't helped. Facing concerns about weak demand in China and record U.S. oil production, the producer group, led by Saudi Arabia and Russia, scrapped plans to increase supply starting October 1.

Initially, oil prices spiked, but gains soon faded. U.S. crude ended slightly down at $69.15 per barrel, the lowest close since December.

“Is there a sense of panic and fear within OPEC+?” Lipow asked, referring to the current sentiment in the group.

“The market is still very bearish,” added Bob McNally, president of Rapidan Energy Group. “We’re likely to see continued downward pressure on gas prices in the coming weeks.”

McNally, who previously advised President George W. Bush on energy, said OPEC+’s decision was not influenced by U.S. politics, despite the timing.

“They were faced with either allowing a steep price drop or delaying the tapering,” McNally said.

OPEC+ has postponed its decision by two months, meaning the group will decide its next move just before the November election.

However, the oil market is unpredictable. If violence in the Middle East disrupts oil supplies or the Russia-Ukraine war intensifies, oil prices could surge, reversing the decline in gas prices.