Photo: Freepik
Gas prices are hovering near their lowest summer level in four years as millions of people ready themselves to hit the roads over the Fourth of July holiday weekend.
The national average for a gallon of gas on Thursday stood at $3.16, which amounts to a nearly 10% decline from a year ago, AAA data showed. Gas prices dropped in recent weeks as crude oil erased a spike set off by the outbreak of war in the Middle East.
Twenty states boast average gas prices below $3, spanning from New Mexico to Missouri to South Carolina. Mississippi, the state with the nation’s lowest gas prices, offers drivers an average gallon for $2.71.
“The lower gasoline prices provide welcome relief for travelers,” Timothy Fitzgerald, a professor of business economics at the University of Tennessee who studies the petroleum industry, told ABC News.
Cheap crude oil is the main driver of low gas prices, analysts told ABC News.
The U.S. West Texas Intermediate futures price — a key measure of U.S. oil prices – has plummeted more than 17% since a recent peak in January.
Oil prices have dropped as forecasters predicted a slowdown in global economic growth, which would slash demand for oil.
Meanwhile, the alliance of oil-producing countries known as OPEC+ has increased output in recent months, boosting supply. The extra oil on the market has helped accommodate an annual surge in demand that takes hold over the summer traveling season, Aixa Diaz, a spokesperson for AAA, told ABC News.
“Most of what we pay at the pump is in direct correlation to the price of crude oil,” Diaz said.
Crude oil prices surged as war broke out in the Middle East last month, but prices have returned to where they stood before the recent conflict between Israel and Iran.
“The resolution in the Middle East does help,” Patrick de Haan, the head of petroleum analysis at GasBuddy, told ABC News.
“We have everything down at levels that nobody ever thought possible,” Trump said in a social media post in April.
Speaking at an event in Ochopee, Florida, on Monday, Trump claimed gas prices had fallen below $2 per gallon in five states.
GasBuddy, which tracks prices at thousands of gas stations nationwide, found zero locations offering gasoline below $2 per gallon, de Haan said in a post Monday on X. That remained true as of Thursday, de Haan told ABC News.
Trump could be referring to wholesale gas prices but such price levels hold little relevance since they are not paid by consumers, de Haan said.
“This does not pass the sniff test,” de Haan added.
Gas prices will likely remain at current levels over the remainder of the summer — and they may even drop lower, some analysts said. Gas supply typically increases over the course of the summer, alleviating price pressures, they added.
Still, prices could rise in the event of a geopolitical conflict, disruptive hurricane season or major oil refinery outages, de Haan said, adding the national average price for a gallon of gas could drop below $3 by September.
“It could happen if we don’t see any of those caveats,” de Haan said. “If it’s a normal year.”
Source: msn
