American drivers are taking a break from pumping with gasoline prices falling for two straight weeks after hitting a record high in early March.
National average gas prices fell to $4.11 a gallon on Sunday, the lowest since the average hit $4.33 on March 6, according to the auto club AAA. The last time the losing streak lasted this long was in September 2020.
Lower fuel costs offer some relief to US consumers, who are struggling with higher prices from food to housing amid decades of high inflation. The Biden administration’s decision late last month to order the largest release of oil in history from the country’s reserves, amounting to one million barrels of oil a day for six months, helped cool prices.
Bob Yawger, director of futures at Mizuho Securities, said Pump prices could fall back to $3.50-$4/gallon by Memorial Day. The drop will correlate with West Texas Intermediate crude oil futures business he said: about 85-100 dollars a barrel.
WTI crude oil – which accounts for most of gasoline prices – has fallen below $95 per barrel as Covid-19 cases resurgence in China dimmed the demand outlook, helping to erase nearly all price gains as a result of Russia’s invasion of Ukraine.
According to the latest government data, U.S. gasoline demand on a four-week rotational basis has declined over the past three weeks, going against seasonal norms. National stockpiles are trailing the five-year average, and US fuel producers are working harder than pre-pandemic levels after returning from overdue maintenance.
At current rates, gasoline is still 40% higher than it was at the same time last year on an unadjusted inflation basis.