GasBuddy head of petroleum analysis Patrick De Haan discusses the drop in gasoline prices across the country on ‘Varney & Co.’
Gasoline prices have fallen in time for the holidays despite a surge in demand as record numbers of people hit the road.
According to AAA, the national average for a gallon of regular gasoline fell more than 4 cents last week to $2.89. According to AAA data, this is the cheapest December since the end of 2020.
Gas Prices – National Average: $2.89
AAA characterized the year as “stable” for prices, as there were no sharp spikes.
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Andy Lipow, president of Lipow Oil Associates, said consumers are benefiting from “a significant oversupply of crude oil, keeping prices below $60 per barrel,” which in turn drives down retail gasoline prices.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| USO | UNITED STATES OIL FUND – USD ACC | 68.03 | +0.84 |
+1.25% |
| BNO | UNITED STATES BRENT OIL FUND – USD ACC | 27.93 | +0.35 |
+1.27% |
West Texas Intermediate (WTI) crude, the U.S. benchmark, is trading around $56.55 per barrel on Friday, and Brent Crude, the international benchmark, is trading near $59.82 per barrel on Friday.
The states with the cheapest gas are Oklahoma $2.34, Arkansas $2.46, Iowa $2.47, Colorado $2.49 and Wisconsin $2.51.
The states with the highest prices are Hawaii $4.43, California $4.33, Washington $3.96, Alaska $3.59 and Oregon $3.57.
Keeping crude oil prices low is critical as they typically account for about half, if not more, of total pumping costs, depending on market conditions.
Customer Jann Gregg of Schenectady pumps gas at the GasWay Xpress Mart at 1120 Erie Blvd. pump gas on Wednesday, December 3, 2025 in Schenectady, NY (Lori Van Buren/Albany Times Union via Getty Images/Getty Images)
Lipow attributed this surplus to “near-record production from the United States, Canada, Brazil, Argentina and Guyana,” as the Organization of the Petroleum Exporting Countries (OPEC) and its allies have restored their voluntary production cuts implemented 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 reconsider their strategy, and they have halted the return of additional barrels to the market in early January 2026,” Lipow said, adding that prices could have been even lower if China had not bought discounted oil from Russia, Iran and Venezuela to replenish their strategic petroleum reserves.
A morning commuter cycles past a gas station price sign on West Third Street in misty rain on November 21, 2025 in Bloomington, Indiana. (Jeremy Hogan/Getty Images/Getty Images)
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However, this excess supply, along with lower prices, has given the Trump administration the opportunity to pursue a more confrontational policy with Venezuela.
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Essentially, the market can absorb the loss of Venezuelan oil right now without the risk of a price spike, Lipow explains.
A gas pump 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 expected to continue to fall as crude oil prices remain low.
EIA’s November Short-Term Energy Outlook forecast that the price of Brent crude oil will fall from $69 per barrel in 2025 to $55 per barrel next year. That would be well below the 2024 $81 per barrel.
According to the report, retail gas prices are expected to hover around $3 per gallon by 2026.
