Image source: Car World Automotive
On Wednesday, AAA reported that the national average for regular gasoline fell three cents, and prices fell to $4.16 a gallon.
Falling prices at the pump continue to bring relief to people, especially in the face of inflation and a shrinking economy.
The national average gas price has fallen for 50 straight days.
On June 14, gasoline prices reached an average high of $5.02. Since then, gasoline prices have fallen 86 cents. Last month, the national average dropped 65 cents.
AAA reported that nineteen states have average gas prices below $ 4, including Ohio, Iowa and Wisconsin.
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The factors of the fall in prices
The drop in gasoline prices can be attributed to a number of reasons: from fears of a recession pushing oil prices down to less American driving as prices have soared 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 quantifying the impact wasn’t easy.
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 streak has more room to run,” said Kloza.
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.
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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 an unexpected rise in crude oil and gasoline inventories, prompting people to worry about their energy needs.
The US 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 over the past few days and weeks on concerns about a global economic slowdown.
On March 8, barrels closed at $123.70. Since then, US oil prices have fallen about 27%.
In addition, oil prices fell Wednesday after the US 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 initially recovered on Wednesday when OPEC + announced a deal to increase production slightly starting next month.
According to Rapidan Energy Group, the deal represents the lowest percentage increase in production in OPEC history.
US gas prices fall for 50 straight days