Oil Prices Slide to 20-Month Low Amidst Record Production

In a welcome respite for consumers, gasoline prices in the U.S. have plunged to their lowest levels since mid-2022, propelled by record-breaking domestic oil production. Last Wednesday, the national average price for regular unleaded gasoline stood at $3.12 per gallon, significantly below the recent peak of $5.11 recorded in June 2022.

This decline marks a remarkable 39% tumble over the past 18 months. While gas prices fluctuate across states, California retains the questionable distinction of having the highest average price for regular gasoline in the U.S. at $4.68 per gallon, while Texas offers drivers the cheapest option at $2.59 per gallon.

The driving force behind this decline is the unprecedented surge in U.S. crude oil production, which reached an all-time high of 12.9 million barrels per day in September 2023. The completion of oil wells drilled during the period of peak prices in 2022 continues to come online.

The U.S. Energy Information Administration estimates that the country's daily crude oil production averaged 11.9 million barrels in 2022, a figure projected to increase by at least 500,000 barrels in 2024.

While the decline in gas prices brings relief to consumers, it occurs against the backdrop of the recent COP28 climate summit, where national representatives agreed to a resolution urging countries to transition away from fossil fuels. 

The U.S., despite advocating for carbon emissions reductions, faces criticism from environmental activists for its unwavering commitment to oil production, as it remains the world's largest producer.