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U.S. Gas Prices Fall To Pre Russia-Ukraine Levels As Oil Extends Slump

Gas prices have fallen for 11 consecutive weeks, taking the national average to around $3.81 per gallon and saving American drivers around $450 million each day.

U.S. gasoline futures slumped back to levels last seen prior to Russia's invasion of Ukraine in overnight trading Wednesday, setting up further pump price declines heading into the Labor Day weekend.

Gasoline futures for September delivery were marked 6 cents lower in European trading at $2.633 per gallon after settling last night at $2.6944, the lowest since February 18, just four day's prior to the start of Russia's war on Ukraine.

The AAA motor club indicates the national average for gas prices has fallen for 11 consecutive weeks to $2.841 per gallon, amid a ramp-up in U.S. drilling and the quietest hurricane season -- with no named storms since July 3 -- in the Gulf of Mexico region since 1941.

The declines are saving American drivers around $450 million a day in fuel costs, according GasBuddy's head of petroleum analysis Patrick De Haan, who pegs the national average at $3.81 per gallon. 

“Some issues have developed that we’re keeping a close eye on, including the shut down of the largest refinery in the Midwest," he wrote in a recent blogpost. "While that refinery may get back online sooner rather than later, it’s not impossible that down the road the situation could impact prices in the region. For the rest of the country, however, we’ll continue to see prices moderate." 

Weak manufacturing data from China, the world's biggest energy importer, is also pressuring global crude prices, which are set for their third consecutive monthly decline, as the economy's powerhouse manufacturing sector slips into contraction amid extended Covid lockdowns and a searing summer heatwave.

"Brent has returned to $100 with the slower growth and demand narrative once attracting sellers. In addition, a two-day plunge in EU gas prices also weighing on sentiment while new Covid infections and the worst heatwaves in decades in China added to the negative sentiment," said Saxo Bank's chief commodities strategist Ole Hansen. "On the supply side the Iraq turmoil is not having any impact on oil supplies while an Iran nuclear deal still lingers.'

Brent futures contracts for October delivery, the global pricing benchmark, were last seen $3.58 lower on the session at $95.73 per barrel in European trading hours. 

WTI futures for October, which are tightly-linked to U.S. gas prices, were marked $2.82 lower at $88.82 per barrel.