MW Travelers may pay the cheapest Labor Day gas prices in 5 years. Here's the reason why.

By Myra P. Saefong

Labor Day gas prices likely to be lowest since 2020, according to GasBuddy

Labor Day gasoline prices will likely be the cheapest since 2020.

Americans this weekend are likely to pay the lowest gas prices at the pump on the Labor Day holiday since the pandemic, thanks in part to Wall Street bracing for a sharp slowdown in travel this fall.

While summer's end typically coincides with a pullback in travel, this year has been complicated by foiled U.S. efforts to squash the flow of crude from Russia, contributing to the first monthly drop in oil prices since April.

"Oil's selloff this month isn't about some sudden collapse in demand - it's the seasonal baton pass from summer's tailwind to autumn's headwind," said Stephen Innes, managing partner at SPI Asset Management.

The calendar is "unforgiving," he told MarketWatch - and with Labor Day in sight, traders are "bracing for the taper in travel and a softer September burn rate."

'Oil's selloff this month isn't about some sudden collapse in demand - it's the seasonal baton pass from summer's tailwind to autumn's headwind.'Stephen Innes, SPI Asset Management

On Friday, U.S. benchmark West Texas Intermediate crude for October delivery (CL.1) (CLV25) fell 0.9% to settle at $64.01 a barrel. Prices based on the front-month contract ended 7.6% lower for the month - marking the first monthly loss since April, according to Dow Jones Market Data.

Innes saw this month's oil-price selloff as a "reminder that once summer's music fades, oil often dances to a slower rhythm."

On that note, retail gasoline prices look to officially end the summer driving season a bit higher than where they started it - but much lower than a year ago.

The average national price for a gallon of regular gasoline stood at $3.204 Friday afternoon, according to GasBuddy. It had ended the month of May less than dime lower at $3.119. Compared with a year ago, prices were down 14.1 cents a gallon.

GasBuddy pegged the average U.S. price for a gallon of regular unleaded gasoline at $3.204 on Friday.

Oil's decline

Meanwhile, for oil, "what should have been a bullish spark - Washington doubling tariffs on Indian goods in an effort to choke off Moscow's crude lifeline - has fizzled," Innes said. India, instead, continues to "absorb" discounted Russian barrels, which is likely the reason why Saudi Arabia is in a "defensive crouch, eying October price cuts to Asia to maintain steady flows."

For crude to break higher, it needs "either a genuine demand surprise or a true supply shock," said Innes. "Right now, it has neither."

A new escalation in tensions in the Middle East - which has been fairly quiet as of late - could send crude prices rising, however, with a subsequent rise in gasoline prices at the pump, said Gary Cunningham, director of market research at Tradition Energy.

Oil is "trapped between real [supply] draws and a resilient consumer on one side, and seasonal [demand] slowdown, rising OPEC+ supply and trade friction on the other," he said. "The tape feels like a holding pattern: Inventories say bid, seasonals say fade, geopolitics [say] maybe."

5-year low for Labor Day gas price

Against that backdrop, GasBuddy said earlier this week that it expects gas prices on the last summer holiday weekend of this year to average $3.15 a gallon. That would be the lowest Labor Day price at the pump since 2020, it noted.

"When it comes to gas prices, it's been the cheapest summer to hit the road since the pandemic, a trend that will likely continue with the potential for the national average to fall below $3 per gallon this fall," said Patrick De Haan, head of petroleum analysis at GasBuddy, in a press release.

"We've seen a remarkably affordable summer to hit the road with incomes up and gas prices down, but there are some challenges that remain: hurricane season and uncertainty over trade, tariffs and Russia's war on Ukraine," he said. Atlantic hurricane season officially ends on Nov. 30.

Still, De Haan said he remains "optimistic" that as the weather cools, gas prices will "seasonally cool off" too.

-Myra P. Saefong

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August 29, 2025 16:41 ET (20:41 GMT)

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