The average price of a gallon of regular gas fell to $ 4.32 per gallon, down from $ 4.33 per gallon on Monday, according to AAA. Even at just nine-tenths of a hundred, it was the largest one-day drop in gas prices since August 2021.
Of course, gas prices remain historically high. Prior to last week, the record high was $ 4.11 per gallon, a level first reached in 2008. Last week, gas set four consecutive records before prices remained virtually unchanged over the weekend. it’s Monday.
The drop in retail gas prices follows a sharper drop in oil prices in trading on Monday, when prices fell 8%. If oil prices remain at this level, there could be more significant relief coming to the pump, perhaps as much as 20 cents a gallon, predicted Tom Kloza, global head of energy analysis at Oil Price Information Analysis, who holds track of gasoline prices for AAA. But he is not surprised that the drop in gasoline prices followed the drop in oil prices.
“Gasoline prices can skyrocket and fall like a feather,” Kloza said.
Even if drivers get that 20 cents-per-gallon break at the pump, it’s unlikely it will last.
Demand for gasoline in the United States is likely to increase, especially with record increases in jobs over the past year and more workers who worked from home returning to the office.
Kloza said that as summer driving season approaches and the US switches to a more expensive summer blend of gasoline designed to fight smog and pollution, prices are likely to rise to around $ 4.50 per day. gallon.
There are two factors that could limit the rise in oil and gasoline prices: one good, one bad.
The good one would be peace in Ukraine, especially a peace leading to the lifting of sanctions on Russia by the United States and many other Western nations. Hopes for peace negotiations on Monday partly contributed to lower oil prices.
Russia is one of the largest oil exporters in the world. Although relatively little Russian oil reaches US customers, the price of oil is on global commodity markets. So the disruption of the flow of its oil had caused prices to skyrocket.
The bad news that could bring prices down would be a new wave of Covid-19, forcing countries that had opened up to reset restrictions on businesses and individuals. China imposed new lockdowns over the weekend due to a surge in Covid. This was one factor in the drop in oil prices on Monday, according to analysts.
The rise in gas prices so far this year has been historic, sometimes reaching the steepest rate of increase since Hurricane Katrina hit the US Gulf Coast in 2005, devastating oil rigs and refineries in the region. The US average price has risen 78 cents, or 22%, since February 23, the day before Russia invaded Ukraine.