The average gas price in the United States rose consistently for several months, bringing prices to their highest level in years and forming a large part of the inflation picture. But now, there are growing signs that the peak this year has already passed.
After the average gas price dropped for the first time in months last week, it dropped again this week, reaching down to $3.39 per gallon, according to data released by GasBuddy.
The average price is still 2.8 cents higher than a month ago, but it’s finally beginning to go down. And according to GasBuddy, the price of oil is a big factor.
“With oil prices plunging nearly $10 from the recent peak of $85 per barrel, motorists will start to see gas prices decline nationwide, just in time for Thanksgiving, and the decline could stretch for several weeks,” Patrick De Haan, head of petroleum analysis for GasBuddy, said in the blog post.
“It’s not impossible- so long as oil prices hold near these levels or continue falling- that the national average could shed 15 to 30 cents per gallon over the coming weeks, while some areas like California could see declines of as much as 25 to 40 cents, De Haan said. “While there’s reason to be optimistic that the peak of gas prices will soon be behind us, the decline in the price of oil is likely reflecting the possibility of a coordinated global release of oil from strategic reserves. If that doesn’t happen, oil could again rally. However, with Covid cases on the rise again reducing global demand, it does seem the most likely outcome will be a drop in gas prices that could last several weeks.”
Part of the reason oil prices have dropped is that there is a rise in coronavirus cases in some parts of the world, reducing demand.
Meanwhile, AAA said in a recent weekly report that its estimate of the average gas price is down to $3.40 a gallon, down a penny from the week before.
“The price of crude oil accounts for about 50%–60% of what consumers pay at the pump, so a lower oil price should translate into better gasoline prices for drivers,” Andrew Gross, AAA spokesperson, said via a company announcement. “But until global oil production ramps back up to pre-pandemic levels, this recent dip in the price of crude may only be temporary.”
Last week, President Joe Biden asked the Federal Trade Commission to look into possible anti-consumer behavior by the oil and gas industries.
“The bottom line is this: Gasoline prices at the pump remain high, even though oil and gas companies’ costs are declining,” Biden said in the letter to FTC Chair Lina Khan. “The Federal Trade Commission has authority to consider whether illegal conduct is costing families at the pump. I believe you should do so immediately.”
Stephen Silver, a technology writer for the National Interest, is a journalist, essayist and film critic, who is also a contributor to The Philadelphia Inquirer, Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.