WASHINGTON—The national average for a gallon of gasoline is $4.80, down eight cents over the past week, according to AAA.
“Domestic gasoline demand dipped recently, which took some of the pressure off pump prices. About 80% of stations are now selling regular for under $5 a gallon,” said Andrew Gross, AAA spokesperson. “But July is typically the heaviest month for demand as more Americans hit the road, so this trend of easing prices could be short-lived.”
Yesterday, the benchmark U.S. oil price closed below $100 a barrel at $99.50—marking the first time it’s closed below $100 since early May. It’s also the largest one-day percentage decline since April, reports the Wall Street Journal.
AAA reports that according to the latest Energy Information Administration (EIA) data, gas demand is 8.93 million barrels a day, which is lower than last year’s rate of 9.11 million barrels a day at the end of June. Additionally, traders have been considering a possible economic downtown that would cool demand for fuel. Consumer spending was down in May, underscoring investors’ building concerns about the possibility of a recession, according to the Journal.
“The acceleration of recession expectations in the second half of the year has weighed on a slew of commodities, and oil has gotten swept up in that to a large extent,” Jim Ritterbusch, president of oil-advisory firm Ritterbusch & Associates, told the Journal.
Further adding to the uncertainty are concerns over more COVID-19 lockdowns in China. Meanwhile, all oil and gas fields that were impacted by a strike in Norway's petroleum sector are expected to be back in full operation within a couple of days.
Last week, OPEC+ agreed to maintain its planned oil output increase for the month of August despite calls to further raise the output in efforts to lower the price of crude oil. The group will increase monthly overall production for the month of August by 648,000 barrels per day.
Here’s how to explain to customers why gas prices aren’t dropping quicker when the price of crude oil is.