Oil prices have continued to slide, taking wholesale and retail gas prices with them.
The latest losses accelerated following U.S. data showing crude and gasoline stockpiles unexpectedly surged last week, and OPEC+ said it would raise its oil output target by 100,000 barrels per day. Light sweet crude fell nearly 4% to just above $90 per barrel. That is the first time oil closed below $91 per barrel since Russia invaded Ukraine.
The Energy Information Administration (EIA) also said domestic jet and motor fuel consumption declined 19% and 7.6%, respectively, from the week before. Gasoline futures in New York dropped nearly 5% to $2.91 per gallon, the lowest point since late February.
The drop in crude oil prices has led to a substantial drop in the retail price of gasoline. After hitting record high prices in June, average gas prices have fallen for 50 straight days and are now approaching $4 per gallon. The national average price of regular unleaded gasoline is now $4.14 per gallon. That is a 17% decline from the previous high of $5.02 per gallon set back on June 14.
Whether gas prices continue to move lower could depend on several factors, including potential hurricanes in the Gulf of Mexico that would force refineries offline, as well as unanticipated disruptions from the conflict between Russia and Ukraine. Analysts say the price of gas could fall under $4 a gallon over the next two weeks if there are no disruptions.
“Crude oil futures, according to the CME Group, show prices trading between $85 to $95 per barrel through the December contracts, which indicates that traders believe oil prices will remain relatively stable for the rest of the year. If they are correct, then gas prices should continue to fall commensurately,” said Caleb Silver, Editor-in-Chief of Investopedia.