U.S. gasoline prices have fallen for seven straight weeks and are approaching an average price of $4 a gallon, easing the pain of record-high fuel costs amid shrinking global demand for oil.
The average cost of a gallon of regular unleaded gasoline sank to $4.19 Tuesday, the 49th straight day that prices have declined, according to OPIS, an energy-data and analytics provider. That is a 17% decline from the previous high of $5.02 a gallon set back on June 14, according to OPIS.
Global demand for oil has fallen in recent weeks as economic growth has slowed around the world, including in China, analysts said. Demand data and consumer surveys also suggest Americans are driving less.
That global drop-off in oil demand has led to an improvement in oil supplies, resulting in lower oil and wholesale fuel prices, analysts said. Americans, as a result, are paying less at the pump than they were at the beginning of the summer.
Whether gas prices keep moving lower depends on several factors. Potential hurricanes around the Gulf of Mexico could force refineries offline, and unanticipated disruptions from the Russia-Ukraine conflict could both drive gas prices up again, analysts said.
Patrick De Haan, head of petroleum analysis at GasBuddy, said he thinks the U.S. hit peak gas prices in June. The average price of gas could fall under $4 a gallon over the next week or two if there are no major disruptions to supplies, Mr. De Haan said.
Fuel prices surged around the globe following Russia’s invasion of Ukraine, which disrupted the global oil market. That conflict’s impact for U.S. consumers has become more muted as Russia was able to continue selling oil to India and China, freeing up Europe and the U.S. to buy oil from other producers, said Mr. Kloza of OPIS.
Even with the price declines, there continue to be big regional differences in gas prices. Currently 19 states, mainly located in the south, have average gas prices below $4 a gallon, according to OPIS, which is part of Dow Jones & Co., publisher of The Wall Street Journal.
The average price of gas in California is $5.59, which is tops in the nation according to OPIS. That’s 33% higher than the national average, but is also a 13% decline from the state’s peak on June 14.
Meanwhile, the average price of gas in Texas is $3.69 a gallon, which is lowest in the U.S., according to OPIS. That’s a 21% drop off from the state’s peak on June 15.