Gasoline costs may dip beneath $3 a gallon earlier than the election

Top analysts now see the nationwide average easing to $3 a gallon—or below—in the coming weeks, potentially removing a key source of voter anxiety.

Patrick De Haan, head of petroleum analysis at GasBuddy, said an X post on Saturday that U.S. gas prices are now $3.187 per gallon.

“We continue to track toward the $2.99 mark, something that we expect will happen in October!” he wrote.

While the U.S. average remains above $3, large chunks of the country are already below that threshold, with GasBuddy saying Delaware and Iowa became the 16th and 17th states to join that club on Saturday.

Separate data from AAA show the nationwide average for gas prices is $3.217 per gallon, down 17% from a year ago. Most states in the South and parts of the Midwest already pay less than $3, including the key battleground states of Georgia, North Carolina, and Wisconsin. But in Nevada, another critical swing state, prices are $4 a gallon.

Lower gas prices have been a major factor in inflation cooling this year. The most recent consumer price index report showed an annual increase of 2.5% last month, the fifth straight decline in the inflation rate and the smallest uptick since February 2021.

Meanwhile, Brent crude oil prices have tumbled 24% from a year ago and now sit at about $72 a barrel. That’s as U.S. oil production continues notch fresh record highs, while other crude producers like Guyana, Brazil and Canada are ramping up too.

The gusher of global supply is too much for OPEC+ to offset as it tries to extend its output curbs. At the same time, China’s slowing economy means there’s less demand for crude, prompting Wall Street analysts to predict oil will head toward $60 a barrel.

“We may be going into Election Day with gasoline close to $3 a gallon, which takes one issue off the table that Democrats had been worried about a few months ago,” energy guru Daniel Yergin, S&P Global vice chairman, told CNBC on Friday.

But he added that geopolitical concerns, like Mideast tensions, are still hanging over oil prices.

Despite the drop in gas prices, opinion polls still show voters trust Republican candidate Donald Trump more on the economy than his Democratic rival, Kamala Harris.

Lower inflationary pressure is helping improve consumer sentiment. The latest University of Michigan reading rose to 69.0 in September from 67.9 in August.

The survey also found that year-ahead inflation expectations fell for the fourth straight month, slipping to 2.7%, which is the lowest since December 2020 and within the pre-pandemic range of 2.3%-3.0%. 

“Sentiment is now about 40% above its June 2022 low, though consumers remain guarded as the looming election continues to generate substantial uncertainty,” Joanne Hsu, director of the university’s Surveys of Consumers, said in a statement. “A growing share of both Republicans and Democrats now anticipate a Harris win.”