A person pumps gasoline at a Conoco gas station, a brand owned by Phillips 66, in Brooklyn, New York, U.S., November 11, 2021.
Andrew Kelly/Reuters
Gas prices sit below $4 per gallon at the majority of US stations, President Biden said Wednesday.
Prices have fallen for 49 days straight amid waning demand and rebounding supply.
The US average still sits above $4, but it should fall below that level in a few days, according to GasBuddy
After months of sky-high gas prices, Americans are finally getting some relief at the pump.
The majority of US gas stations now sell gas for less than $4 per gallon, President Joe Biden said in a Wednesday tweet. That’s down from the peak average of $5.01 per gallon seen in mid-June, and is back around where it was in mid-April.
The new average is just the latest encouraging marker after several weeks of decline. The national average slid to $4.11 on Thursday, according to GasBuddy. While still above $4, that measure is boosted considerably by higher prices in California, Hawaii, and Oregon, where averages still hover above $5.
It will take less than a week for the nationwide average to fall below the $4 threshold, Patrick De Haan, head of petroleum analysis at GasBuddy, said in a Thursday tweet. Some 85,000 stations already tout gas prices below that level, and averages in 20 states have already fallen under $4. North Dakota and Delaware could join that cohort on Wednesday if the price slump holds steady, De Haan added.
Average gas prices have fallen for 49 days straight amid a confluence of encouraging trends. Gas demand slid to 8.5 million barrels per day in the week ending July 29, according to the Energy Information Administration. That’s down from the prior week’s reading of 9.2 million barrels and the year-ago level of 9.4 million. The downtrend also comes amid the peak summer travel season, suggesting demand could fade faster as the school year begins and Americans drive less.
Gas supply, meanwhile, has steadily ticked higher. Total gasoline stocks rose slightly to 225.3 million barrels last week, bringing inventory within spitting distance of its historical range.
Energy Information Administration
Tumbling crude oil costs have also placed downward pressure on pump prices. West Texas Intermediate crude oil futures traded at roughly $89 per barrel on Thursday, down from nearly $100 just one week ago. Lower crude prices leave gas companies with lower costs, and signals prices at the pump will likely continue to drop through August.
The decline also stands to drag overall inflation lower. Gas prices have been among the biggest contributors to the Consumer Price Index in recent months, helping push the measure to its fastest year-over-year growth rate since 1981. As such, lower gas prices could pull CPI from its four-decade high and cement June as the peak of pandemic-era inflation.
Retail gas prices are projected to fall for at least another week, meaning economists can “already pencil in gasoline detracting from August headline CPI,” Conor Sen, an opinion columnist at Bloomberg and founder of Peachtree Creek Investments, said in a Tuesday tweet.
Falling gas prices, then, won’t just offer relief at the pump. They could just mark the beginning of the end of the US’s inflation nightmare.