Gas prices could drop to $2.99 next week
Crude oil prices fell on August 4 to their lowest prices since before Russia invaded Ukraine, as the futures market pointed to a possible recession that could dampen consumer demand.
US oil benchmark WTI fell below $90 a barrel for the first time since the invasion began in February at $88 while Brent crude fell to $95 a barrel as RBOB, the market at gasoline futures fell to $0.05.
The outlook for crude oil prices is difficult to predict, although the spread between WTI and Brent could still widen until there is some sort of resolution to the Russian-Ukrainian dispute, Bernard said. Weinstein, a retired professor of economics at Southern Methodist University in Dallas. The street.
Retail gasoline continues to fall
Pump prices hit their 49th day of declines with gas prices averaging $4.11 a gallon and are now 92 cents lower than in mid-June.
Consumers are getting a well-deserved respite as inflation has exponentially driven up the costs of household basics such as energy, housing and food.
The national average is expected to drop to $3.99 a gallon in “less than a week” since 20 states and 85,000 stations have already reached that level, said Patrick De Haan, head of petroleum analysis at GasBuddy, a provider Boston-based retail fuel company. price information and data.
Two other states, North Dakota and Delaware, could also bring gas prices down to under $4.
Gasoline prices at the pump may even drop to $2.99 as early as next week, De Haan said.
The states that would benefit would be in one of these 10 states: Texas, South Carolina, Oklahoma, Georgia, Arkansas, Tennessee, Mississippi, Alabama, Louisiana or Kentucky.
Although this is a potential scenario, drivers should hold back their enthusiasm for now, he said.
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“Yes it is possible, but don’t jump for joy because it probably won’t be near you,” he tweeted. “If oil markets maintain these lower levels, we could see a few stations, perhaps in Texas, South Carolina or low-tax states, drop below $3/gal in the coming days. .”
The smallest declines so far have been in the northeastern states due to “tight inventories and low gasoline imports” and because this region “rely on supply outside the area to meet demand,” he said.
Why gasoline prices could drop further
Crude oil prices are unlikely to see major gains due to the shrinking economy, Weinstein said.
“In the United States, a slowing economy, coupled with reduced demand following the summer vacation season, should keep crude oil prices in check,” he said. “The current economic slump in China, which was previously the world’s largest importer of crude oil, will also dampen demand for crude oil.”
Retail gasoline prices may continue to fall this fall, but they are unlikely to fall below $3.25 a gallon as global oil supplies remain tight, Weinstein said.
“US oil exports, particularly to Europe, can be expected to increase for the foreseeable future as Europe attempts to wean itself off Russian oil,” he said.
Reach the peak of hurricane season
Any hurricane that makes landfall in the Gulf of Mexico could derail lower gasoline prices as inventories “remain low,” Rob Thummel, senior portfolio manager at Tortoise in Overland Park, told The Street.
“An unexpected outage like a hurricane affecting the Gulf Coast could push gasoline prices back up to around $4,” he said.
Global refining capacity increases again by about 1 million barrels per day through 2023 after declining by more than 3 million barrels per day from 2020 to 2022, Thummel said. “The increase in global refining capacity will provide relief to consumers by keeping gasoline prices at $3 for the next few years.”
Colorado State University estimated an active Atlantic hurricane season and predicted 18 named storms (including three that have already formed), eight hurricanes, and four major (Cat 3+) hurricanes.