Relief in Sight? Gas Prices Drop Below $5 a Gallon

June 22, 2022 Topic: Gas Prices Region: United States Blog Brand: Politics Tags: Gas PricesInflationU.S. EconomyJoe BidenGasOilEnergy

Relief in Sight? Gas Prices Drop Below $5 a Gallon

After several weeks of increases that put the average gas price in the United States over $5, prices finally dropped last week.

 

After several weeks of increases that put the average gas price in the United States over $5 for the first time ever, prices finally dropped in the last week, GasBuddy said.

For the first time in nine weeks, the average price dropped 4.2 cents to $4.97 per gallon, the site said. The price remains up 37.3 cents from a month ago and $1.92 per gallon from the same time a year ago.

 

“Finally some relief! For the first time in nine weeks, gasoline prices have fallen, following a broad sell-off in oil markets last week, pushing the national average back under the $5 level with most states seeing relief at the pump,” Patrick De Haan, head of petroleum analysis at GasBuddy, said in a blog post this week.

This happened even as demand rose for gasoline last week.

“I’m hopeful the trend may continue this week, especially as concerns appear to be mounting that we may be on the cusp of an economic slowdown, putting downward pressure on oil. But the coast isn’t yet entirely clear. We could see the national average fall another 15 to 30 cents, if we’re lucky, by the time fireworks are flying, barring any unexpected shutdowns at a time when the market is extremely sensitive to such.”

The most common price encountered by American drivers, GasBuddy said, was $4.99 per gallon.

Last Friday, AAA reported that the average had dropped one cent since the previous Monday from $5.01 to $5 even.

“According to new data from the Energy Information Administration (EIA), total domestic gasoline stocks fell by 700,000 bbl to 217.5 million bbl last week,” AAA said in its announcement. “Meanwhile, gasoline demand declined slightly from 9.2 million b/d to 9.09 million b/d. The slight drop in gas demand has helped to limit pump price increases. However, as crude oil prices remain volatile, the price per gallon for gasoline will likely remain elevated.”

Montana had seen an increase of 18 cents while Nebraska rose 15 cents, and Missouri, Wyoming, and South Dakota saw increases of 13 cents.

An analysis published this week by the Washington Post looked at why gas prices are so different in some states than others. It’s a matter of several factors, from proximity to refineries and pipelines to gas taxes and state and local regulations.

“Delivering gas in Texas is obviously cheaper because the refineries are right there,” Pavel Molchanov, director and equity research analyst at Raymond James, told the Post. “In places where there are no refineries, the fuel needs to be delivered maybe thousands of miles, and that costs more.”

President Biden plans to visit Saudi Arabia next month and is expected to discuss oil production with OPEC nations.

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.

Image: Reuters.