The average price for a gallon of regular gas fell to $4.32 a gallon, down from $4.33 a gallon on Monday, according to AAA. Even at just nine-tenths of a cent, this was the biggest one-day drop in gas prices since August 2021.
Of course, gas prices are still historically high. Prior to last week, it was a record high of $4.11 a gallon, a level first reached in 2008. Last week, gas range Four records in a row Before prices remain virtually unchanged over the weekend and Monday.
The drop in retail gas prices came after a sharp decline Low oil prices In Monday’s trading, prices fell by 8%. If oil prices stay at that level, there could be more significant relief down the road at the pump, perhaps as high as 20 cents a gallon, predicted Tom Kloza, global head of energy analysis at Oil Price Intelligence, which tracks gasoline prices. for AAA. But it is not surprising that the drop in gasoline prices is behind the decline in oil prices.
“Gasoline prices can go up like a rocket and go down like a feather,” Kloza said.
Even if drivers get to break 20 cents a gallon at the pump, it’s not likely to last.
There are two factors that can limit the rise in oil and gasoline prices: one is good and one is bad.
Goodness is peace in UkraineEspecially the peace that led to the lifting of sanctions on Russia by the United States and many other Western countries. Hopes for Monday’s peace negotiations were partially helped by lower oil prices.
Russia is one of the largest oil exporters in the world. Although Russian oil has relatively little access to American customers, oil is priced on global commodity markets. So disrupting the flow of its oil led to higher prices.
The bad news that could drive prices down will be a new wave of Covid-19, forcing countries that have been opening up to re-impose restrictions on businesses and individuals. China imposed new lockdowns Over the weekend due to the spread of Covid. That was one factor in lower oil prices on Monday, according to analysts.
The rise in gas prices so far this year has been historic, at times achieving the highest rate since then Hurricane Katrina It hit the US Gulf Coast in 2005, destroying oil platforms and refineries in the area. The average price in the US has risen 78 cents, or 22%, since February 23, the day before Russia invaded Ukraine.