The most common price is $3.49 per gallon, Patrick De Haan, head of petroleum analysis at GasBuddy, a Boston provider of retail-fuel-pricing information, told The Street. The cheapest 10% of stations are selling gasoline for an average of $3.22 a gallon, and now the average price is $3.72 a gallon. Diesel sells for $4.996 a gallon.
Consumers have had little break from higher gasoline prices over the past two months, even as inflation in energy, housing and food costs eroded income from wages.
“Americans will spend $430 million less on gas today than in mid-June,” he said.
Drivers should not rely on falling gasoline prices for more than a few weeks.
“I think we are in the last innings or in the fall for a while,” De Haan said. “We may just be stagnant under $4 a gallon for some time, but there’s a lot of economic data that could give us a nudge one way or another.”
He added that some areas of the US, such as the West Coast, may see further price cuts because their decline is less than in the South and Midwest.
Peak gasoline demand ends
De Haan said the peak of gasoline demand is over. Compared to a week ago, petrol sales have declined every day this week except on Thursday.
Petrol prices have declined since peaking at $5.03 on June 14. They have decreased by more than $1 per gallon, reflecting the fall and volatility in crude oil prices.
On August 4, crude oil prices fell to their lowest level before Russia’s invasion of Ukraine in late February. West Texas Intermediate settled at $88 a barrel while Brent crude, the international benchmark, fell to $95 a barrel.
Crude oil prices have been volatile as news of weak economic growth from China lowered WTI earlier this week.
Economic data such as low inflation can actually boost consumer confidence, resulting in higher demand for gasoline.
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“Furthermore, positive economic data can bring optimism and increase demand, while bad economic data can do the opposite,” De Haan said.
Petrol prices fall in the fall
Gasoline prices drop during the fall months as demand decreases, consumers drive less and gasoline is cheaper to manufacture in the winter.
Gasoline prices are at their summer peak and refiners will begin producing specified gasoline for the winter months. Richard Joswick, head of global oil analytics at S&P Global Commodity Insights, told The Street that those formulations are easier to make and cost less because of the products used to blend crude. He expects Brent crude prices to “fall below $100 before the end of the year.”
By mid-September refiners switch to producing cheaper winter gasoline, de Haan said.
“Demand calms down and motorists have less draw to exit as temps drop,” he said.
The midterm or presidential elections have nothing to do with gasoline prices and there is no “conspiracy”, de Haan said.
Hurricane weather can affect prices
The peak hurricane season is near and begins in late August, which can affect production and refining capacity.
A major storm “could disrupt oil production in the Gulf as well as refineries in the region, should a major storm head for the region,” De Haan said.
A major storm making landfall along the Gulf Coast could result in a $10 increase in oil prices, raising gasoline prices to $0.25 a gallon, says Rob Thummel, senior portfolio of Turtles in Overland Park, Kan. The manager told The Street.
He said the closure of refineries could bring petrol prices back in the mid-$4s.
Colorado State University forecasts an active hurricane season and estimates 18 named hurricanes, eight hurricanes, and four major hurricanes that are Category 3 or higher.