Topline
The national average for a gallon of regular gasoline has fallen to $3.05, while U.S. crude oil barrels are at $57.56 per barrel, the lowest since early 2021, as global oversupply, tepid demand and economic uncertainty push prices down.
SAN FRANCISCO – MARCH 12: Bill Bydewell prepares to pump fuel into a piece of construction equipment at a Chevron gas station March 12, 2007 in San Francisco, California. (Photo by Justin Sullivan/Getty Images)
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Key Facts
The nation’s average price of gasoline has fallen 4.9 cents over the past week and stands at $3.051 per gallon, according to the American Automobile Association (AAA).
The national average is down 14.9 cents from a month ago and is 14.4 cents per gallon lower than a year ago.
The national average price of diesel dropped 3.1 cents in the last week to $3.642 per gallon, per AAA.
At least 32 states have an average gas price below $3 per gallon, with Oklahoma recording the lowest at $2.551.
The EIA’s Weekly Petroleum Status reported U.S. oil inventories rose 3.5 million barrels in the week ending October 10,2025, reaching 423.8 million barrels.
Global inventories have climbed to 7.9 billion barrels, a four-year high, even as global demand is expected to hover around 700 million barrels in 2025, according to EIA.
Crucial Quote
“We could even see a handful of stations in places like Oklahoma, Texas, or even Wisconsin drop below $2 per gallon in the weeks ahead — something not seen since the pandemic,” said Patrick De Hann, head of petroleum analysis at GasBuddy.
Why Are Gas Prices Dropping Globally?
Global oil output is rising faster than demand, driving prices down. According to the International Energy Agency (IEA), this is largely driven by OPEC+ producers (Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria and Oman) rapidly easing the voluntary cuts introduced in 2023 after years of restraint, adding roughly 1.4 million barrels per day in 2025 and another 1.2 million in 2026. Non-OPEC producers (United States, Brazil, Canada, Guyana and Argentina) are also contributing to supply growth by roughly 1.6 million barrels per day in 2025 and an expected additional 1.2 million barrels in 2026, mostly driven by improved operational efficiency in Brazil and increased oil production from the U.S. Meanwhile, global oil demand in both 2025 and 2026 is expected to be closer to a tepid 700 million barrels per day.
Why Are Gas Prices Dropping In The Us?
The same dynamic is unfolding domestically. U.S. supply remains high while demand has softened. The EIA reported, U.S. crude oil inventories rose to 423.8 million barrels, up from the previous week but still 4% below the five-year seasonal average. However, this paired with gasoline demand dropping 3.2% year over year, signals sluggish consumption even as refineries continue producing at near-record highs. As a result, the national average for regular gasoline has dropped to about $3.05 per gallon.
How Are Us-China Trade Tensions Influencing Oil Demand?
Oil prices dipped below $60 late last week after President Trump warned of new tariffs on China in response to its restrictions on rare earth exports, according to GasBuddy’s De Haan. Markets stabilized after Beijing clarified that exports would continue, though under tight oversight. Analysts cited by the Wall Street Journal note the global oil glut has been partly hidden by China’s ongoing crude stockpiling. Last month, Reuters reported that China’s crude imports and domestic output have exceeded refinery processing rates, resulting in a surplus of roughly 1 million barrels per day being stored rather than consumed. This stockpiling has temporarily propped up demand, but once and if storage slows, the underlying oversupply could put renewed pressure on global oil prices.
What Does This Mean For Us Consumers And Companies?
For U.S. consumers, falling oil prices mean cheaper gasoline and lower energy costs, freeing up household spending. Yet, for U.S. companies, especially oil producers, the price drop is forcing cost cuts, layoffs and consolidation as firms adapt to slimmer margins despite record output.
Source: https://www.forbes.com/sites/martinacastellanos/2025/10/17/heres-why-gas-prices-are-dropping-right-now/
