Gasoline consumption is expected to go down next year in the US as Americans continue to work remotely, fuel efficiency improves, and inflation stays high, impacting consumer spending.

The Energy Information Administration expects gasoline demand to fall by 1% in 2024, which would translate to the lowest per-person gasoline consumption in two decades.

“Relatively high gasoline prices and persistently high inflation may be affecting consumer budgets and reducing discretionary driving,” reads the agency's latest energy outlook report.

The study adds, “An aging population is reducing per person driving. Since 2001, the share of population over the age of 65 has increased, and this age cohort is less likely to be working.”

The report also highlights how electric and hybrid vehicles contribute to the reduction of gas consumption on per capita basis.

“We forecast the average person in the United States will consume 402 gallons of gasoline in 2024, down from a peak of 475 gallons per person in 2004,” reads the report.

Gas prices have been on a downward trend recently, with the national average at $3.40 per gallon, according to AAA.

The EIA forecasts the average for 2023 to come in at $3.55 per gallon, compared to $3.97 last year. The agency expects the price to rise to an average of $3.60 in 2024.

“Our forecast that retail gasoline prices will rise in 2024 primarily reflects a higher Brent crude oil price. We expect crude oil prices to contribute an additional 22 cents/gal to the retail gasoline price in 2024 compared with 2023,” reads the report. "However, we expect much of this increase to be offset by decreases in the wholesale gasoline margin over crude oil."

On Wednesday West Texas Intermediate (CL=F) slid more than 2% to around $75 per barrel after falling 4% in the prior session amid demand worries and assumptions the Israeli-Hamas war has yet to interrupt supply. Brent (BZ=F) crude also slipped by 2.5% on Wednesday, hovering just below $80 per barrel.

"Near term, futures have entered an 'oversold' condition with an upside correction due," said Dennis Kissler, senior vice president at BOK Financial's trading division.

Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on Twitter at @ines_ferre.

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