Gasoline prices are hovering below $3 a gallon in more than half of all U.S. states, according to AAA’s daily gas price tracker, easing the inflationary pressures that have gripped consumers most of this year.

On Thursday, the national average price for a gallon of regular gasoline was $3.12, according to the AAA, down from $3.25 a month ago and about the same as the $3.13 logged a year ago.

It’s a considerable drop from its June 2022 peak, when the national average price eclipsed $5 a gallon. That month also marked the top of the post-pandemic inflationary cycle that pushed the consumer price index up to 9.1%. In November, CPI fell to 3.1%.

Gasoline prices have taken a bit of a bounce after hitting their 2023 low of $3.06 on Dec. 18, but no trend moves in a straight line. “Daily gas prices will likely move back and forth for the next month or so,”  said Andrew Gross, AAA spokesperson.

Nationally, Hawaii and California suffer the highest gas prices at $4.68 and $4.65, respectively. Texas and Mississippi had the lowest at $2.67 and $2.68, respectively.

Overall, drivers have been benefiting from a decline in gasoline demand due to changing driving habits following the pandemic, as well as a drop in crude oil prices. The U.S. crude oil benchmark, West Texas Intermediate, was trading for less than $74 per barrel on Thursday, down from about $94 in September.

Wars in the Middle East and Ukraine haven’t disrupted oil supplies as much as feared. The U.S. produced a record amount of oil and natural gas this year and is on track to produce even more in 2024. The U.S. also is exporting record amounts of oil, according to the Energy Information Administration.

“Consistent reports of oil oversupply have hindered the market’s attempt to drive prices higher,” Quincy Krosby, chief global strategist and Joshua Cline,  associate analyst at LPL Financial in Charlotte, N.C. in a recent research report. “Production in the U.S. has reached record levels with 13.24 million barrels a day being added to supplies, which is more than [the] supply from Russia or Saudi Arabia.”

Fuel tracking website GasBuddy predicts gasoline will average $3.38 a gallon over the next year, down from $3.51 this year this year and $3.95 last year, according to its data.

“Next year should represent a continued march towards what most Americans would consider normal prices at the pump,” Patrick De Haan, GasBuddy’s head of petroleum analysis, told CNN.

Unexpected disruptions, however, are always in the cards when it comes to predicting gasoline prices. Turmoil in the Middle East still has the potential to boost oil prices in 2024, particularly with attacks on commercial vessels in the Red Sea by Yemen’s Houthis.

OPEC+ nations, which include Russia, could further cut their production levels to to boost prices. Hurricanes in the Gulf of Mexico might disrupt oil production and shut down refining capacity. And extreme heat, like the U.S. experienced in last year’s record hot summer, has the potential to shut down refineries.

Barring the unexpected, a further decline in gasoline prices will juice the U.S. economy and keep the Federal Reserve on track to cut interest rates as inflation declines. The central bank is widely expected to make three quarter-point cuts to its key rate, which is now at a 22-year high of 5.25% to 5.5%.

The Fed next meets Jan. 30-31 to decide on interest rates.

“With lower prices of gasoline and durable goods, as well as slower increases of housing prices, inflation is forecast to moderate further in 2024,” said Bill Adams, chief economist for Comerica Bank in Dallas. “As such, Comerica forecasts for the Fed to cut the federal funds target by three quarters of a percent over the course of next year.”