Almost as quickly as they soared upward, fuel prices in the United States have decreased steadily over the past several weeks. Indeed it may soon be possible for gas prices to go below $4.00 in several states.
As of July 8th, the average price per gallon for regular-octane gas went down to $4.77. The said average price noted by the Energy Information Administration marked the third consecutive week of steady decline for fuel prices, putting the national average 5% under the $5.01 per gallon high registered in June.
A significant decrease in the wholesale price of fuel may push pump prices down further. Likewise, the crack spread – the industry term for refinery profit margins – has decreased as the cost of refining crude petroleum into usable fuel products has also decreased.
Is a Longer Downtrend in the Works?
According to Patrick De Haan, head of petroleum analysis at GasBuddy, American drivers and vehicle owners had begun to spend less on fuel over the past couple of weeks, around a total of $100 million less every day compared to how much they were spending when fuel prices peaked in June.
If crude oil prices continue to decrease, many stations can lower pump prices by one to two pennies every two days. Indeed, over 2,500 gas stations throughout the United States are selling gas at $3.99 or even lower. De Haan remarked that we might see the gas prices plummeting under $4 in thousands of gas stations over the next several weeks.
Uneven Price Drops
However, while the price of gas has gone down in several states, others have yet to see a price drop within their jurisdiction. Californians, for example, are still paying around $6.22 per gallon. Indeed, the price of gas on the West Coast may not dip below $5 for several months.
Indeed, to say that there will be a steady decline in gas prices all over the country may not necessarily be true. While a decreased demand for fuel pushed prices down earlier this season, the fact that there are still several weeks left for the peak travel season may force an upward surge in demand as people pick up on long-postponed travel plans.
But it is becoming more evident that states in the Sun Belt – Arkansas, Georgia, and Louisiana, among others – will be among the first to pay less than $4 per gallon as the summer draws close.