This expert thinks Phoenix gas prices will continue to drop. Here's why
The average price for a gallon of regular unleaded gas in Arizona is around $3.70, according to AAA Arizona.
That’s more than 30 cents higher than the national average, but is lower than it has been. The average has dropped about a dime in the last week, and about 60 cents in the last month. And, that decrease is coming just as lots of Arizonans will hit the road for Thanksgiving next week.
Patrick DeHaan, head of petroleum analysis at GasBuddy, joined The Show to talk about it more.
What is behind this price drop here, especially in the Phoenix area?
Well, in the Phoenix area, as many know, prices surged because of refinery issues in California late in the summer. And so really the decline now is partially a resolution of some of those refinery issues, but it's also seasonality. Americans simply don't drive as much in the colder weather. There's less reason to get outside. And as we start to see colder temperatures and snow north to south, Americans simply just don't consume as much gasoline, and that puts downward pressure on prices. That is evidenced coast to coast, as you mentioned, Phoenix gas prices are down significantly from a month ago. A lot of that having to do with those refinery issues that have been resolved.
So the 75-cent drop in Phoenix now the average $3.73 a gallon. But we're starting to impressively see some stations in the Phoenix metro area within 20 cents of falling below that $3-a-gallon mark.
Is that kind of drop over the course of a month considered a big one?
It certainly monumental. Probably one of the larger drops. In fact, one of the rare times when the adage that many Americans say, "Oh, prices go up faster than they come down." But in this instance, very rare that price have actually gone down faster than they went up.
So, would you anticipate then that prices will continue to go down here?
I do, I think it is a trend. I, in the context of all of this, the seasonality, the refinery issues being resolved. I didn't mention the icing on the cake — and that's that oil prices today have now touched their lowest level since July, they're down almost 5% to $73 a barrel. So that's going to be the gift that keeps on giving, so long as oil prices don't reverse.
I do think that we could even see the average in Phoenix potentially falling to the low $3 mark with even more stations falling below the $3 mark by the end of the year.
We sometimes see prices go up as demand goes up during the holiday travel season. Is that going to happen this year?
Well, it's not really actually the case. It, it's one of those myths that keeps on being repeated, but generally speaking, while Americans do hit the road frequently — and Wednesday is going to be a very busy day — they also park. And they don't go to work, they don't go to school Thursday. Many of them don't move much on Friday, Saturday and then they all drive home Sunday.
So while there's a big shift in demand, demand for holidays is actually in the winter — at least in the fall and winter — a little bit lower than what you might expect.