Gas prices have fallen more than 50 cents since June. How low could they go?

What is happening

Gasoline prices have continued to decline since hitting an all-time average high of $5.02 in mid-June.

why is it important

Lower prices would help US households fight ongoing inflation.

According AAAand within a penny of that threshold in seven others.

Nationally, Monday’s average was higher — $4.36 a gallon — but that’s still a healthy decline from the all-time high of $5.02, hit on June 14. The cost could drop further in the coming weeks, analysts predict.

Barring hurricanes, outages and other unforeseen disruptions, the national average is expected to fall back to $3.99 by mid-August, Patrick De Haan, head of oil analysis at GasBuddy, predicted in a recent blog post.

“So far, we’ve seen the national average drop for 34 straight days, with more than 25,000 stations now back at $3.99 a gallon or lower, and thousands more stations to join this week,” he said. added DeHaan.

Here’s what you need to know about gas prices, including where they might go next and what the White House is doing to control them.

For more on the gas crisis, find out which states are gasoline tax exemption and who are issue gas rebate checksand discover quick tips to save money at the pump.

How low could gasoline prices go?

While we’re nowhere near the $2.82 per gallon average we saw in 2019 — or even the $3.16 average this time last year — experts like De Haan and the advisor in White House Energy Amos Hochstein predict the price of gas will soon fall below $4 for the first time since March 2022.

“We already have many gas stations across the country that are under $4,” Hochstein said. told CBS News’ Face the Nation July 17.

He added that the rapid decline was all the more notable as there is “a war in Europe where one of the parties to the war is the third largest [oil] producer in the world. »

Why is gas so expensive in the first place?

Russia’s continued invasion of Ukraine is an obvious factor. According to the White House, the war drove gasoline prices up more than $1.70 a gallon at its peak. Although the United States does not import a lot of crude from Russia, oil is traded on a global market and any changes affect prices all over the world.

But the Russian invasion is not the only factor: even though demand is approaching pre-pandemic levels, producers are still reluctant to increase production.

“We’ve had an imbalance between supply and demand for some time,” said Troy Vincent, senior market analyst at an energy analytics firm. DTN, told CNET. “And he will remain, whether this conflict goes away or not.”

A gas station in Washington, DC shows gas prices above $5 a gallon.

The $6 a gallon forecast looks much less likely now than it did in May.

Win McNamee/Getty Images

President Joe Biden has also accused big oil companies of profiting.

“In the midst of a war that has driven gasoline prices more than $1.70 a gallon, historically high refinery profit margins are compounding that pain,” Biden wrote in a June 15 letter to executives. of Exxon Mobil, Chevron, Shell and other companies.

How much will gasoline cost this summer?

Market volatility has made it difficult to forecast gasoline prices. In May, Natasha Kaneva, head of commodities research at JP Morgan, predicted the price at the pump could climb to $6.20 a gallon by August.

On June 13, gasoline hit $5.02 a gallon, a record high, though still below the 2008 peak of $4.14 adjusted for inflation. But breaking the $6 threshold, or even the $5 limit again, seems much less likely today.

“If oil drops below $100 and stays there, we could see gasoline prices move closer and closer to $4,” said AAA Northeast’s Mark Schieldrop. told the Boston Herald. “Assuming everything continues as it has been, we should be back to $4,” Schieldrop added, “and hopefully we break that $4 benchmark and get back into the [$3 dollar range].”

DeHaan expects several states to fall back below the $4 average soon, with the majority in the South “but that could spread to other states in the coming weeks.”

Wednesday, Caroline from the south, Georgia and Texas were already below the $4 threshold.

What is the Biden administration doing to lower gas prices?

In June, Biden approved a nationwide three-month gas tax waiver. Individually, half a dozen states have already suspended state gasoline taxes.

In a letter, Biden also called on major oil companies to work with his administration to address production cuts as well as “inventory, price and refining capacity issues.”

He has previously criticized them for sitting on more than 12 million acres of federal land approved for drilling and 9,000 production permits, suggesting he wants oil companies pay fines to leave unused leases.

In March, the White House began releasing 1 million barrels of oil per day from the US Strategic Petroleum Reserve. The unprecedented pullback, which is expected to last six months, could lower gasoline prices between 10 and 35 cents per gallon.

“It will bring the price of oil down a bit and encourage more demand. But it’s still a band-aid on a significant supply shortfall,” said Scott Sheffield, chief executive of Texas-based oil company Pioneer Natural Resources. told the New York Times.

In April, the Environmental Protection Agency E15 gasoline year-round sales approved, a cheaper, high-ethanol fuel. The impact will be modest, as only about 2,500 of the country’s more than 100,000 gas stations sell the mixture.

The United States is also considering obtaining energy products from other sources: Biden went to Saudi Arabia at the beginning of the month, in part to encourage the kingdom to increase production. But she and other OPEC countries say they are already pumping full steam ahead.

Help is unlikely to come from outside OPEC: this year, major oil companies like Shell, BP and Exxon Mobil are should invest half what they did in production ten years ago.

The Biden administration has been work to improve diplomatic relations with Venezuelawhich has been banned from selling oil to the United States since 2018. And the White House is negotiating another nuclear non-proliferation treaty with Iran, which could bring Iranian oil back to market.

How can drivers save at the pumps?

You can cut back on non-essential travel and shop for the best price, even crossing state lines if that’s convenient for you.

Apps like Gas Guru find the best gas prices in your area. Others, like FuelLog, track your car’s gas mileage and can help determine if it’s getting decent fuel economy. Additionally, many gas station chains have loyalty programs and credit cards have rewards programs that offer cash back for gas purchases.

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