Gas prices fell below $4 a gallon around the nation last night, according to data from the AAA motor club, pulling pump costs to the lowest levels since early March.
The national average cost for a gallon fell 2 cents to $3.99 per gallon as of this morning, a move that takes down around 21.9% from their record highs in early June. The year-on-year costs remain 25.2% higher, however, but the fifty-two day decline, as well as an ongoing pullback in both gasoline demand and crude prices, should mean lower pump costs by the end of the Labor Day weekend.
Consumer advocate GasBuddy's head of petroleum analysis, Patrick De Haan, thinks prices are set to fall by as much as 25 cents per gallon over the next couple of weeks, but notes that the late August hurricane season could temporarily jolt supplies.
The reduction has also come at a cost, however, as much of the decline in global oil prices has been linked to President Joe Biden's decision to release around 180 million barrels of crude from the U.S. Strategic Petroleum Reserve. That's put a drain on emergency stockpiles, which the Energy Department said yesterday are now sitting at the lowest levels since April of 1985.
Gasoline inventories were also lower, falling by 5 million barrels this week to the lowest since 2015, suggesting the cheaper prices has re-kindled domestic driving demand.
Still, Biden's push to have domestic drillers increase their output has been largely successful: U.S. production is up about 500,000 barrels per day this year to a near-record pace of 12.2 million barrels per day.
WTI crude futures for September delivery, the most tightly-connected contract to U.S. gas prices, were marked 18 cents higher in overnight trading at $92.11 per barrel, but are down around 33.7% from the highs they reached in the immediate aftermath of Russia's invasion of Ukraine earlier this year.
Brent crude contracts for October delivery, the global pricing benchmark, are more affected by develops in Europe and China, where Covid restrictions in the world's second-largest economy continue to take their toll on demand.
October Brent was marked 80 cents higher on the session at $98.18 in overnight trading, but has fallen some 17% since early March, with declines this week linked to Beijing's 'zero Covid' policy, which included new restrictions centered around the tourist island of Hainan and followed data earlier in the week that indicated the weakest July crude import totals in at least four years.