Image source: Car World Automotive
On Wednesday, AAA reported that the national average for regular gasoline fell three cents, and prices dropped to $ 4.16 per gallon.
Falling pump prices continue to relieve people, especially in light of inflation and a shrinking economy.
The national average price of gas has fallen for 50 consecutive days. However, on June 14, gasoline prices hit an average high of $ 5.02.
Since then, gasoline prices have fallen by 86 cents. Last month, the national average fell 65 cents.
AAA reported that nineteen states have average gas prices below $4, including Ohio, Iowa and Wisconsin.
The factors of the fall in prices
Lower gasoline prices can be attributed to several reasons, from fears of a recession driving down oil prices to less U.S. driving as prices surged above $5 a gallon.
“When people pay, and they see $100 for the bill, they panic and become apoplectic,” said Tom Kloza, global head of energy analysis at the Oil Price Information Service.
The Biden administration’s unprecedented release of emergency oil from the Strategic Petroleum Reserve also played a role.
However, Kloza acknowledged that it was not easy to quantify the impact.
Possibility of further price reduction
Whatever the reason, falling gas pump prices have eased the minds of consumers struggling with high prices for groceries, rent and other necessities.
While the average gas price across the country is $ 4.16 per gallon, Kloza pointed out that high prices in places like California add to the figure.
Meanwhile, OPIS reports that the average price is $ 3.99.
“This series has more room to run,” Kloza said.
The president of consulting firm Lipow Oil Associates, Andy Lipow, expects the national average to drop to $4.10 a gallon within seven to 10 days.
Lipow expects the average Labor Day price to drop to $4.
The oil situation
Oil prices fell on Wednesday, closing at levels not seen since Russia invaded Ukraine.
The losses came as a new government report revealed unexpected increases in crude oil and gasoline inventories, prompting people to worry about their energy needs.
The U.S. fell 4% to trade at $90.66 a barrel. The number is the lowest since February 10, two weeks before Russia invaded Ukraine.
Meanwhile, Brent, the global benchmark, fell more than 3%.
Oil prices have fallen in recent days and weeks on fears of a global economic slowdown.
Barrels closed at $ 123.70 on March 8. Since then, oil prices in the United States have fallen by about 27%.
Additionally, oil prices fell Wednesday after the U.S. Energy Information Administration said weekly oil inventories rose 4.5 million barrels last week amid expectations of a decline.
Meanwhile, gasoline stocks have also increased slightly.
The oil market recovered on Wednesday when OPEC + announced a deal to slightly increase production starting next month.
According to Rapidan Energy Group, the deal represents the lowest percentage increase in production in OPEC history.