Unleaded Regular Gas Price Analysis - April 2025

Summary

Key Findings:

• Gasoline prices in April 2025 reached $3.33/gallon, representing a 3.0% monthly increase (+$0.098) but an 11.8% annual decline (-$0.446)
• Global oil markets experienced significant volatility due to trade tariff announcements and OPEC+ production increases, with Brent crude falling to four-year lows
• The EIA forecasts gasoline prices will average $3.14/gallon for summer 2025, down 9% from the previous year, primarily due to lower crude oil prices
• OPEC+ surprised markets by tripling their scheduled production increases to 411,000 barrels per day in May

Recent Price Trends

Monthly Performance

The latest BLS data shows $3.330 per gallon for April 2025, marking several important trends:

• Short-term increases: +3.0% (1-month), +3.7% (3-month), +1.6% (6-month)
• Annual decline: -11.8% compared to April 2024 ($3.776)
• Recovery pattern: Prices have been recovering from December 2024 lows of $3.145

Historical Context

Comparing April 2025 to previous years reveals significant price compression:

• April 2024: $3.776 (-$0.446 difference)
• April 2023: $3.735 (-$0.405 difference)
• April 2022: $4.271 (-$0.941 difference)

The current price level represents the lowest April reading since 2021 ($2.839), indicating substantial market correction from the 2022 peak.

Key External Factors Affecting Prices

Trade Policy and Tariffs

Global oil markets were significantly impacted by trade tariff announcements in early April, with concerns that measures could stoke inflation, slow economic growth, and intensify trade disputes. On April 2, 2025, after President Trump announced "reciprocal tariff" policies, Brent crude oil plunged 9.7% to a four-year low of $63.58 per barrel.

OPEC+ Production Decisions

Eight OPEC+ members surprised markets by tripling their scheduled production target increases for May to 411,000 barrels per day. In June, OPEC+ agreed to increase output by another 411,000 barrels per day, following the May increase by the same amount.

Economic Outlook Revisions

The IEA lowered economic growth assumptions, leading to a 400,000 barrel per day reduction in expected oil demand growth, with global oil demand growth for 2025 revised down to 730,000 barrels per day.

Market Fundamentals

Supply Dynamics

World oil supply rose by 590,000 barrels per day to 103.6 million barrels per day in March, up 910,000 barrels per day year-over-year. The United States is producing at record highs and is forecast to be the largest source of supply growth in 2025, though proposed tariffs on Canada and Mexico may impact flows.

Demand Patterns

Global oil demand growth is projected to slow from 990,000 barrels per day in Q1 2025 to 650,000 barrels per day for the remainder of the year as economic headwinds and record EV sales curb use.

Inventory Levels

Global oil stocks rose by 25.1 million barrels in March but remained well below the five-year average at -221 million barrels.

Regional Price Outlook

National Forecast

The EIA estimates U.S. average gasoline prices in 2025 will decrease by 11 cents per gallon, or about 3%, compared with 2024. In 2026, they forecast a further decrease of about 18 cents per gallon, or an additional 6%.

Regional Variations

Rocky Mountain prices are expected to remain flat in 2025 due to steady regional population growth and constrained infrastructure. West Coast prices may face upward pressure in 2026 due to the Phillips 66 refinery closure.

Risk Factors and Uncertainties

Geopolitical Risks

Recent sanctions on Russia and Iran have yet to significantly disrupt loadings, though some buyers have scaled back purchases. The IEA anticipates price volatility from geopolitical tensions, including the halt of Russian gas transit via Ukraine.

Economic Sensitivity

Higher tariffs have raised recession fears that could slow oil demand, with Goldman Sachs noting that high spare capacity and recession risk skew oil price risks to the downside.

Production Capacity

Decreasing U.S. refinery capacity over the forecast period may offset some downward pressure from lower crude oil prices on gasoline prices.

Conclusion

April 2025 gasoline prices reflect a complex interplay of recovering domestic demand, significant global supply increases, and heightened trade policy uncertainty. While prices have increased modestly in recent months from winter lows, the annual decline of 11.8% demonstrates the substantial impact of lower crude oil costs and increased global production capacity. The outlook suggests continued price moderation through 2025, though geopolitical developments and trade policy implementation remain key variables to monitor.