For the 50th consecutive day gasoline prices have continued to fall, dropping the price of a gallon of regular gas to $2.99 in a few states. It offers a welcome reprieve for consumers who have been hard hit by the fast pace of inflation this year.
According to Patrick De Haan, head of petroleum analysis at GasBuddy stations in Oklahoma and Kansas are offering unleaded gas for $2.99 as of August 4th. At the Loves Travel Stop in McPherson, Kan., on Aug. 5 regular unleaded gas was selling for $2.99 a gallon.. Meanwhile a 7-Eleven gas station in Oklahoma City lowered its price to $2.99 on Aug. 4. The national average is still $4.09 per gallon, however 21 states are now selling a gallon of gasoline for under $4, and a handful have dropped below $3.
De Haan said, “We’ll see the national average fall to $3.99 a gallon next week, and it could fall to $3.59 a gallon if we avoid hurricanes.”
As of August 5th, Crude oil prices remained under $90 per barrel, with West Texas Intermediate priced at $89.66 and international benchmark Brent crude at $95.47.
Crude dropped to its lowest point since the Invasion of Ukraine in August 4th, as investors were focused on the possibility of an oncoming recession and diminishing demand from customers.
Experts expect the national average for a gallon of gasoline to hit $3.99 in “less than a week,” now that over 20 states and 85,000 stations have reached that price-point, De Haan said.
De Haan noted, because of, “tight inventories and low imports of gasoline,” and the fact the region, “relies on supply from outside the area to meet demand,” the smallest declines have occurred in the northeast states.
Bernard Weinstein, a retired economics professor at Southern Methodist University in Dallas, said in an interview, “In the United States, a slowdown in the economy, coupled with reduced demand after the summer vacation driving season, should keep crude oil prices in check. The current economic doldrums in China, previously the world’s largest importer of crude oil, will also damp the demand for crude oil.”
Weinstein said although gasoline should keep declining into the fall, prices will likely not go below $3.25 per gallon due to the tightness of the global oil market. He added, “U.S. oil exports, especially to Europe, can be expected to grow in the foreseeable future as Europe tries to wean itself off Russian oil.”
Rob Thummel, senior portfolio manager at Tortoise Capital in Overland Park, Kan. noted that global refining capacity is expanding by about a million barrels per day again, and should continue to do so through 2023, after falling by over 3 million barrels per day from 2020 to 2022. He added, “Increased global refinery capacity will provide relief for consumers keeping, gasoline prices in $3’s for the next several years.”
