U.S. gasoline prices drop below $4 a gallon

The average price of U.S. retail gasoline fell below $4 per gallon for the first time in months, giving some relief to drivers in the world's largest consumer of fuel.

The American Automobile Association said the national average price for regular unleaded gas fell to $3.990 a gallon on Aug. 11, and the national average price for regular unleaded gas fell to $3.990 a gallon.

In June, gasoline prices were at a record $5.02 Since Russia invaded Ukraine in February, market fears of restrictions on supply have ebbed as high cost curbed spending and prices have dropped.

In the summer, gasoline prices tend to peak. The latest price drop could help President Joe Biden's Administration and Democrats in Congress as midterm elections approach. The White House has taken a number of measures to curb oil prices after Moscow invaded Ukraine.

The main driver of gasoline prices was crude oil, which reached $139 a barrel at one point, and was $92 on Wednesday.

More work remains but prices are coming down, and the President will call on domestic and international oil producers to increase output so that they can continue to come down, White House spokesperson Karine Jean-Pierre said earlier this week.

The White House is about to release 180 million barrels of crude oil from the U.S. Strategic Petroleum Reserve. The US oil output has risen by about 500,000 barrels per day this year to 12.2 million barrels per day.

Gasoline futures are down 27.3% from June highs, while U.S. crude oil has fallen 25%. The retail decline is more than 20%, but some states have seen more relief, such as Ohio, where prices are down 27% from the peak.

The SPR release, in coordination with releases from the International Energy Agency, lowered the price of gasoline by 17 cents to 42 cents per gallon, according to a July U.S. Treasury Department analysis, though it said the true impact was hard to determine.

According to Bank of America, the fall in prices has helped low-income Americans. In July, the average gasoline spending for lower-income households fell to 9.3% as a share of total card spending per household, down from a peak of nearly 10% in June.

Inflation expectations are falling with consumer expectations falling sharply last month and in the last year in the U.S.

Consumer inflation is still up 8.5% from a year ago, but inflation is still affecting American spending habits, despite the fact that inflation was flat in July.

I'm only half a tank, but I wanted to fill up now, while the prices are good, said Kelly Ferrel, a saleswoman in Atlanta who was filling up on Wednesday for $3.45 a gallon. According to the EIA data, gasoline product supplied is down 6.3% over the last four weeks compared to a year ago.

With job growth still strong, demand could rebound in the coming months with prices at lower levels. In the last week, executives on earnings calls were optimistic about consumption for the rest of 2022.

Analysts say crude could increase later this year because the previous surge did not result in enough demand destruction to end the current deficit. Refiners are expected to prioritize heating oil processing in coming months, cutting gasoline output, which could squeeze the market. U.S. gasoline inventories are at 220 million barrels, lower than any point in the past five years.

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