The price of gas in the US is falling just as quickly as it rose.
The average price for a gallon of regular-grade fuel fell to $4.77 in the week that ended July 4. The national average fell for the third week in a row and is nearly 5% below its June peak.
The daily price data is even better. The national average fell to $4.75 on Thursday, down from the record high of $5.02 recorded in June. GasBuddy recorded a nearly 3-cent decline in the average price per gallon on July 6th, tying the second largest one-day drop in the last decade.
Wholesale gas prices could go down even more. The cost of turning crude into gasoline is not as high as it was a few weeks ago because the profit margins of the refinery are turning over.
Patrick De Haan, head of petroleum analysis at GasBuddy, said on Wednesday that the multi-week decline could be the beginning of a long decline.
If crude oil prices keep falling, most stations will lower prices by 1 or 2 cents a day. He said that more than 2,500 stations across the country are already selling gas for less than $4 a gallon.
"In the days and weeks ahead we're going to see hundreds, nay, thousands of stations falling back under $4 per gallon," he said.
Relief will look very different in different states. The average price for a gallon of gas in California is $6.22, while it's $4.29 in South Carolina, according to the American Automobile Association.
Averages will fall below $4 per gallon in Georgia, Louisiana, Arkansas, and other southern states. The average prices in California are likely to stay above $5 for a while.
It's not a given that a steady decline will happen. There are still a few weeks left in the peak travel season and prices are still low. Some Americans' travel plans could be revived by the fall in gas prices.
There is a lot of uncertainty about the future of crude oil. The decline has been choppy despite the fact that crude has fallen from its peak. West Texas Intermediate crude futures fell as much as 4% on Wednesday, but rebounded as much as 5.8% on Thursday. Gas prices could go back to June's highs if investors buy oil at a discounted price.
There are economists on Wall Street who are anticipating that. According to analysts at JP Morgan, the highest conviction sector is energy. The bank sees current prices as very attractive for investors despite the downturn in energy commodity prices.
The upcoming hurricanes and delayed refinery maintenance could cause prices to go up.
Gas prices have yet to reach the sub-$3 average that was enjoyed before the Pandemic. The US may be past the peak of gas-pump pain as prices continue to drop.
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