Gasoline prices continue to fall in a handful of states to $2.99 a gallon, marking the 50th consecutive day of declines and giving consumers a reprieve as high inflation rates have walloped their budgets.
Gas stations in Oklahoma and Kansas are selling unleaded gasoline for $2.99 as of Aug. 4, according to Patrick De Haan, head of petroleum analysis at GasBuddy, the Boston provider of retail-fuel-pricing information.
The national average is $4.09 a gallon, while 21 states are selling gasoline below $4. A handful of stations have lowered gasoline to $2.99 a gallon.
"We’ll see the national average fall to $3.99 a gallon next week, and it could fall to $3.59 a gallon if we avoid hurricanes," he said.
The Loves Travel Stop in McPherson, Kan., on Aug. 5 was selling regular unleaded gas for $2.99 a gallon..
A 7-Eleven gas station in Oklahoma City lowered its price to $2.99 on Aug. 4.
Even gas stations along the West Coast have started to drop their gasoline prices to $3.99.
More than half the states are now selling gasoline for under $4 a gallon, including North Dakota and Indiana.
Crude oil prices remained under $90 a barrel on Aug. 5. WTI, the U.S. oil benchmark price was trading at $89.66 while international Brent crude was trading at $95.47.
Crude oil prices declined on Aug. 4 to their lowest since before Ukraine was invaded by Russia. The futures market indicated the onset of a possible recession, which could damp demand from consumers.
WTI on Aug. 4 fell below $90 a barrel for the first time since the invasion began in February, touching $88, while Brent crude fell to $95 a barrel.
Inflation has massively driven up the costs of household staples such as energy, food and housing. The consumer price index was 9.1% in the year through June.
The national average is expected to decline to $3.99 a gallon in “less than a week” since 20 states and 85,000 stations have reached that level, said De Haan.
The smallest declines have occurred in the Northeast states due to “tight inventories and low imports of gasoline” and because this region “relies on supply from outside the area to meet demand,” he said.
Gasoline Prices Could Dip More
Crude oil prices are not expected to see large gains because of the contraction in the economy, Bernard Weinstein, a retired economics professor at Southern Methodist University in Dallas, told TheStreet.
"In the United States, a slowdown in the economy, coupled with reduced demand after the summer vacation driving season, should keep crude oil prices in check," he said. "The current economic doldrums in China, previously the world's largest importer of crude oil, will also damp the demand for crude oil."
Retail gasoline prices could keep declining into the fall, but prices are not likely to dip below $3.25 a gallon because global supplies of oil remain tight, Weinstein said.
"U.S. oil exports, especially to Europe, can be expected to grow in the foreseeable future as Europe tries to wean itself off Russian oil," he said.
Peak Hurricane Season Starts Soon
Any major hurricanes that make landfall from the Gulf of Mexico could derail the decline of gasoline prices since inventories "remain low" and would hinder production and refining capacities, Rob Thummel, senior portfolio manager at Tortoise Capital in Overland Park, Kan., told TheStreet.
"An unexpected outage like a hurricane impacting the Gulf Coast could cause gasoline prices to rise back into the mid-$4s," he said.
Global refining capacity is expanding again by about 1 million barrels daily through 2023 after falling by over 3 million barrels a day from 2020 to 2022, Thummel said.
"Increased global refinery capacity will provide relief for consumers keeping, gasoline prices in $3s for the next several years," he said.
The Colorado State University estimated an active hurricane season and predicted 18 named storms, eight hurricanes, and four major hurricanes that are category 3 or higher.