Week in Review: Fuel Prices Hit 4-Year Lows Heading into Memorial Day Weekend

As Americans head into the Memorial Day weekend, fuel markets are navigating a mix of geopolitical tensions, increased supply expectations, and shifting consumer behavior. Crude prices continued to fall on Friday, marking the first weekly loss since April. WTI prompt crude futures dropped more than 80 cents per barrel, pushing prices to $60/bbl. The downturn was triggered by President Trump’s announcement of a proposed 50% tariff on EU imports beginning June 1, stoking fears of a global economic slowdown that could curb oil demand.

Meanwhile, expectations that OPEC+ will raise output in July by 411,000 bpd have added further downward pressure on prices. The alliance has already eased cuts through June and may unwind the remaining 2.2 Mbpd of voluntary curbs by October. The potential for additional supply has put downward pressure on prices, especially as Iran and the U.S. continue nuclear negotiations that could eventually lead to more Iranian oil re-entering the global market.

Kazakhstan is also adding to oversupply concerns. The country’s energy minister indicated that oil output could exceed the 2 Mbpd mark due to the expansion of the Tengiz field, well above its OPEC+ quota of 1.486 Mbpd. Meanwhile, U.S. demand for crude storage has surged, reaching levels not seen since the COVID-19 pandemic, signaling possible short-term oversupply challenges.

Despite these bearish trends in crude markets, refining fundamentals are tightening. Analysts report structural constraints due to refinery closures and delayed projects outside of China, especially in developed markets. Global refining capacity additions for 2025 and 2026 are being revised downward, while utilization rates are expected to rise above historical norms. This dynamic is particularly favorable for Indian refiners and Australian facilities benefiting from government subsidies.

Gasoline prices have hit a four-year low just in time for Memorial Day. According to the U.S. Energy Information Administration (EIA), average retail gasoline prices are down 14% from last year when adjusted for inflation, 11% below 2023 levels. The East Coast, the region with the highest demand, saw a 17% year-over-year price drop to $2.99 per gallon. Gulf Coast and West Coast prices fell 13% and 10%, respectively.

These lower fuel costs have helped drive a record jump in Memorial Day travel. AAA projects that over 45 million Americans will travel at least 50 miles from home over the holiday weekend — the highest number in two decades. Of those, 39 million are expected to hit the road, thanks to cheaper gas and a desire to travel despite broader economic uncertainties.

Prices in Review

Crude prices opened the week at $62.75 and trended lower each day. Tuesday saw a slight dip to $62.68, followed by a more pronounced decline midweek, with prices falling to $62.27 on Wednesday and $61.33 on Thursday. By Friday morning, crude opened at $60.81 — marking the lowest point of the week. Overall, crude fell by $1.94 from Monday’s open, representing a weekly decrease of 3.09%.

Diesel prices opened the week at $2.1444 per gallon and saw modest fluctuations over the following days. Prices dipped slightly on Tuesday to $2.1273 before reversing midweek to $2.1363 on Wednesday and $2.1394 on Thursday. However, the week ended with a sharper drop, as diesel opened at $2.1116 on Friday — the lowest level of the week. Overall, diesel prices fell by $0.0328 per gallon, representing a 1.53% decrease for the week.

Gasoline prices opened the week at $2.1446 per gallon and experienced moderate fluctuations throughout the week. After a slight dip to $2.1411 on Tuesday, prices briefly rose on Wednesday to a weekly high of $2.1549. However, the gains were short-lived, with prices falling to $2.1371 on Thursday and sliding further to $2.1275 on Friday. This marks a total weekly decline of $0.0171 per gallon, or 0.80%.