U.S. gasoline prices were substantially lower than last year heading into the weekend of the Labor Day federal holiday on Monday, which ends the U.S. summer driving season, the U.S. Energy Information Administration (EIA) said on Thursday.

The retail price for regular gasoline in the U.S. averaged $3.31 per gallon on Aug. 26, down about 13% from a year earlier.

WHY IT IS IMPORTANT

The EIA said its estimates show demand is greater heading into the Labor Day weekend this year than last. Its most recent data, which covers the week ended Aug. 23, showed U.S. gasoline demand of 9.3 million barrels a day – the highest for August since 2022.

However, once the summer driving season ends it expects demand to be weaker than last year which should keep gasoline prices lower on average in the months ahead.

CONTEXT

Prices at the pump have been lower due to weak growth in global and U.S. petroleum product demand, continued crude oil production growth from countries outside of OPEC+, and China’s slowing economy, the EIA said in its report.

A series of refinery outages in the U.S. Midwest caused regional gasoline prices to spike to more than 20% above the national average from July 22 to Aug. 5.

BY THE NUMBERS

Gasoline in U.S. inventories currently sits at 221 million barrels about 3% higher than this time last year, EIA data showed.

The Brent crude oil price on Aug. 26, 2024 was down 4% from the same time last year, 2024, the EIA said. The EIA estimated that crude prices contributed 55% to the price of gasoline as of June.