Mother Nature struck hard in September and October with two devastating hurricanes in the Southeast, leaving some regions still recovering today. Thankfully, November didn’t contain more of the same, and hurricane season ended on November 30 without another incident. 

Though weather conditions were stable throughout the month, we did see some disruptions brought about by the Thanksgiving holiday. Let’s take a closer look at the numbers and make some educated guesses about what we can expect for the last few weeks of 2024.  

Last month’s data

As the temperature drops, demand does, too

Each year, fuel industry experts anticipate peak demand in the hottest months of the summer, then a drop as the calendar turns to winter. This expectation held true In November, as falling temperature brought falling fuel demand — and with it, lower prices on liquid fuel products nationwide.  

Nationally, sign prices at the average station declined by just under 10 cents month-over-month for a gallon of regular fuel. The largest drops occurred in the Midwest and in the West, where prices fell by 15 cents and 16 cents, respectively. The sign price decreases in those regions were about three times larger than the drops in the Northeast and the South. 

These sign price changes correspond rather closely with rack price changes, resulting in stable margins during the month of November. Nationally, margins on a gallon of regular increased by less than a cent month-over-month, holding steady since the end of October. Of all regions, the Northeast had the biggest discrepancy between the changes in rack price and sign price in November, but its resultant margin change was minimal. Of course, drivers like to see lower sign prices, and with rack prices falling practically in lockstep, station owners shouldn’t see much difference in the per-gallon numbers.

With fewer drivers pulling up to the pump, we also saw fewer convenience store transactions during November. With margins staying roughly the same, the decrease in transactions means that retailers likely saw lower profits in November 2024 compared to the previous month. That’s a trend we expect to persist into December, too — but more on that in the next section.

You might be wondering how the decrease in demand we’re highlighting tracks with Thanksgiving being the biggest travel holiday of the year. Indeed, an estimated 80 million Americans hit the road for the holiday this year, breaking records from both last year and before the pandemic in 2019. 

Holidays do increase household travel, but they also disrupt typical business activities like commuting and deliveries. From the perspective of fuel, the decreased demand from lower business activity over Thanksgiving is greater than the increased demand from higher household travel.

Let’s illustrate with a chart. The line chart below covers gallons sold each day through October and November 2024. You can see that the lines peak weekly — most of those weekly peaks are Fridays, when volume sales are usually the highest. The troughs, meanwhile, are Sundays.

But for Thanksgiving week, demand peaked on Wednesday, the day before the holiday, and then dropped precipitously on Thursday. Look at diesel fuel in particular — diesel sales are usually constant throughout the week, but diesel sales suffered from an abbreviated week of demand around Thanksgiving.

A chart for c-store transactions shows the same story for inside transactions. Similarly, we saw a weekly peak in c-store demand the day before Thanksgiving, as that’s when the most drivers were on the road.

Though visits were lower at the c-store for the week of Thanksgiving, revenue for retailers looks comparable to other Fridays in November. Why could that be? Digging deeper, we find that consumers treated themselves in the c-store on Thanksgiving Day. Whereas the average shopper bought 2.8 items and spent $12.15 per visit during the rest of November, they bought 3.0 items (a 6% increase) and spent $13.71 (a 13% increase) on Thanksgiving.

Predictions and considerations

Softer business activity, softer demand

Typically at this time of year, we see American oil refineries operating well below capacity in line with the seasonal driving slowdown. But to this point, U.S. refineries have maintained over 90% utilization rates. That’s high for this time of year, especially given that current low crack spreads indicate refineries are not making as much profit. Right now, the higher production seems geared towards increasing low gasoline inventories; however, if it continues, we could see a continued drop in rack prices in December.

We’re also tracking diesel prices, an area where we think we may see an increase in December. Last month, the Energy Information Administration (EIA) made an upward revision to its Q4 forecast, predicting wholesale diesel will cost 12 cents more than it initially projected in October. When wholesale prices rise, sign prices eventually do, too.

Otherwise, we expect a continued drop in fuel and c-store demand as the weather gets colder and the holiday season softens business activity.

Potential tailwinds:

1. November 30th marked the official end of hurricane season. These weather events wreaked havoc on the Southeast in September and October. 

2. Retail margins are healthy, and they’re holding steady. 

3. The Federal Reserve is expected to cut interest rates by 25 basis points at its December meeting. Such a rate cut would boost the purchasing power of consumers and could spur economic activity.  

Potential headwinds:‍

1. Though we’re out of the woods on hurricanes, winter brings the potential for blizzards in the northern United States. While we’re already seeing lower demand, snowy weather could exacerbate the trend.

2. With multiple major holidays throughout the month, we expect to see pauses in business activity similar to what we saw for Thanksgiving.

3. OPEC+ had previously announced they would extend production cuts through December 2024, but recently, the group committed to extending production cuts through the spring and increasing supply gradually starting in April. This will continue to keep crude prices slightly elevated through the winter.

Want a closer look at the data?

Check out our insights hub with all our fuel and convenience monthly updates, plus special industry reports.