As of July, the recent upward trend in gas prices has reversed, giving motorists a break from sky-high prices.
The price of gasoline contributed significantly to the largest yearly increase in consumer prices in the United States in June in four decades at a staggering 9.1 percent. However, gas prices have declined for 28 consecutive days.
This is the longest decline since the early 2020 collapse in energy consumption brought on by the COVID-19 epidemic. Energy specialists estimate that daily gasoline spending in the United States has decreased by $140 million over the past month.
Given that global oil supplies are still somewhat limited, this tendency might readily reverse if a hurricane were to damage a refinery on the Gulf Coast. However, stockpiles are currently increasing due to lower demand and ongoing releases from the government’s strategic oil reserves. On Wednesday, regular gasoline costs an average of $4.63 per gallon across the country, down over 2 cents from Tuesday. Over the past four weeks, the average price of gasoline has increased to more than $5 a gallon, but in the past week, it has dropped 15 cents.
Illinois, Texas, Ohio, and California are all economically significant states, and their prices have dropped by 16 cents or more in the past week.
“In the past 30 days, the average price of gas has dropped by 40 cents a gallon,” President Joe Biden said on Twitter. “That’s breathing room for American families.”
Today’s report is a reminder that inflation is too high – fighting inflation is my top economic priority. And while the numbers today are not acceptable, they are also outdated.
In the past 30 days, the average price of gas has dropped by 40 cents a gallon.
— President Biden (@POTUS) July 13, 2022
He urged oil companies to pass on their savings to consumers and noted that oil prices had decreased faster than fuel prices.
Low-income households are more affected by gas costs since they typically commute further and use fewer fuel-efficient vehicles. However, consumers’ overall views of inflation are shaped by their daily observations of fluctuations in gas costs. Motorists are starting to pay attention, and they like what they see.
Professor of health sciences Melanie Wilson-Lawson was quoted by the New York Times saying, “There’s always the fear that prices will rise but never fall. But I see a significant difference now. It’s huge.”
Wilson-Lawson hopes President Biden’s discussions on his current trip to the Middle East will inspire oil producers to boost supplies and lower prices. How much more Saudi Arabia and other Middle Eastern states can produce is uncertain. Political unrest has stifled production in some nations, including Libya.
Fuel affects all shipped items, especially food. Farmers, construction industries, and airlines rely substantially on fuel costs, especially diesel and jet fuel, which are falling more slowly than gasoline. Diesel is 16 cents cheaper per gallon than a month ago.
Diesel fell 3% while gasoline fell 7%. Wholesale jet fuel prices that don’t contain taxes are down 11 percent monthly. A huge increase in shipments to Europe has helped delay the decrease in local fuel prices since Russia invaded Ukraine in February. Since diesel prices rose, imports have dwindled.
The decline in gas prices follows a drop in worldwide oil prices over the last month amid concerns of a global economic slowdown. In addition, tighter Western sanctions on Russia did not diminish global oil stockpiles as feared since Moscow succeeded in replacing European markets with South America, China, and India.
In the meantime, lockdowns in significant cities in reaction to ongoing COVID-19 increases have also fallen short of predictions that China’s economy, the biggest crude importer, would improve.
GasBuddy, a Boston-based company that measures fuel costs, employs Patrick De Haan as head of petroleum analysis. De Haan added that as oil prices, which have dropped below $100 a barrel, did not rise beyond $105, the trend of decreasing gasoline prices might last for the fifth week.
“We’re not completely out of the woods yet,” De Haan said. “There remains the risk of a spike in prices that could send us to new record levels in August should any disruptions occur. It could be a wild ride, but for now, the plummet at the pump shall continue.”
Oil prices are unstable. They fell almost 7% Tuesday and rose modestly Wednesday. Brent crude, the worldwide benchmark, reached around $140 a gallon shortly after the Ukraine incursion. West Texas Intermediate soared above $130. Both started the year below $80.
