Expect Cheaper Gas Prices This Winter

Falling Gas Prices

Good news for drivers: Fuel prices might be lower this winter.

National gas prices are currently around $3.41 per gallon, down from an average of $3.84 over the summer months.

This isn’t unusual in principle, as the cost of gas tends to drop during the colder months when cars are more likely to sit dormant in the driveway. But there’s a caveat.

Fuel for Thought

Many oil refiners are barely breaking even on gasoline at the moment, as the difference between the price of a barrel of wholesale gasoline and U.S. oil prices is rather small, barely enough to cover the cost of labor and processing, let alone yield a profit.

But conventional car drivers needn’t worry about their fuel supply. Each barrel of crude oil is composed of a mix of fuel types. Lighter fuel is used for gasoline, while heavier types are used for diesel, jet fuel, and heating oil. And while gas prices are trending down, the heavier fuel types have been commanding higher prices, keeping operations profitable.

Looking Ahead

All this has one caveat.

An abnormally warm winter could reduce demand for heating oil, which might move distillate prices lower. If that happened, oil producers might be incentivized to cut back on gasoline production to save on costs. In turn, that could drive gas prices back up.

In other words, if the winter is warmer than usual, it could be a warning sign that higher gas prices are on the way.

Read more reporting here .

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