Top line
The national average price of a gallon of gasoline fell to a two-month low of just over $3.40 on Monday as falling demand prevented a rapid rise in prices at the pump. But analysts warned that conflict in the Middle East and the threat of a major hurricane in the Gulf of Mexico could drive oil and gas prices higher in the coming months.
The price of petrol fell to a two-month low, while the price of diesel fell to its lowest level … (+)
Key data
The average price of gasoline fell to $3.41 on Monday, the lowest since June 9, according to data compiled by GasBuddy from more than 150,000 gas stations across the U.S. (The national average is slightly higher, at $3.44 per gallon, according to AAA).
The decline puts the national average 11.6 cents below the previous month, 42.5 cents below the previous year, and over $1.60 cheaper than the June 2022 all-time record of over $5 per gallon.
Diesel prices have also fallen to an average of $3.72 per gallon, the lowest price since January 2022.
Gasoline prices have fallen steadily since their annual high of $3.69 per gallon in mid-April. At the same time, the price of oil that is refined into gasoline has stagnated. OPEC had previously announced in June that it would reverse voluntary production cuts. In addition, gasoline demand in the US remained lower in the summer than in recent years and even fell in the weeks leading up to the July 4 holiday weekend.
Gas demand continued to decline in July and early August, reaching 8.97 million barrels per day in the week ending August 2, down from 9.25 million barrels the previous week and well below the 9.30 million barrels a year ago, the Energy Information Administration said.
One reason for the below-average demand over the summer was high prices for other goods and services, coupled with stubbornly high inflation that drove up the cost of hotel rooms and restaurant dining, OPIS analyst Tom Kloza told Marketplace. Another reason for the low demand could be the greater fuel efficiency of newer cars, which use less gas per gallon.
Patrick De Haan, chief petroleum analyst at GasBuddy, said gasoline prices continued to fall due to “muted” demand, which he said could further push down the price motorists see at the pump, possibly to the lowest price of the summer.
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Large number
79 dollars. That is the price per barrel for the international benchmark grade Brent Crude Oil. It has risen by almost 4 percent in the last five days, but is still below its annual high of over 91 dollars in April. The US benchmark grade West Texas Intermediate rose by almost 2 percent in the last five days to 78 dollars per barrel.
What you should pay attention to
While motorists may be able to enjoy a breather at the pump this week, that happiness may be short-lived as analysts predict that rising tensions in the oil-rich Middle East could keep oil prices high, while the threat of a hurricane in the Gulf of Mexico could curb oil production in the U.S. In a statement Monday, De Haan attributed the recent rise in oil prices to “rising geopolitical tensions in the Middle East and falling oil inventories,” while AAA spokesman Andrew Gross warned that a Middle East conflict and “some economic uncertainty abroad could mitigate a decline in oil prices.” These warnings come as Israel continues its war in Gaza and an Iran-linked group of Iranian militants in Lebanon and Yemen are trading rocket fire with Israeli forces, worrying Western officials about the possibility of a wider war in the region.
Where is the cheapest gasoline in the USA?
The southern states have some of the cheapest prices at the pump, according to AAA, led by Mississippi ($2.95), Tennessee ($3.01), Oklahoma ($3.03), Louisiana ($3.04), Texas ($3.04) and Arkansas ($3.05). Prices remain high in the Great Lakes region and on the West Coast, due to a number of factors, including higher state taxes on gasoline, refinery maintenance and transportation costs. The most expensive gasoline is in Hawaii, where a gallon costs $4.66, ahead of California ($4.60), Washington ($4.23), Nevada ($3.94), Illinois ($3.89), Oregon ($3.88) and Alaska ($3.76).
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