U.S. gasoline prices are finally falling after the major correction in international crude oil prices at the end of November driven by fears of the new COVID variant, Omicron.
As of December 9, the national average price of a gallon of regular gasoline was $3.338, according to data from AAA. That’s lower than the week-ago average of $3.378 and the average price of $3.419 one month ago.
Gasoline prices in America are still much higher than at this time last year, when a gallon of regular gasoline sold for an average of $2.158 across the country.
For the week to December 6, the national average for a gallon of gas dipped by 4 cents on the week to $3.35. For consumers, gasoline prices were last this low on October 20, AAA said on Monday.
The sell-off amid the Omicron panic and the OPEC+ decision to stick to its policy and continue easing the cuts in January eased upward pricing pressure on U.S. gasoline prices, AAA said.
“Consumers may be catching a break at the pump right now, but it’s not for a very good reason,” AAA spokesperson Andrew Gross said. “A potential COVID-19 induced economic slowdown hurts everyone and could prompt OPEC to slash production if oil prices drop too low,” Gross added.
“More declines coming. $3.29/gal should happen in the next few days,” Patrick De Haan, head of petroleum analysis for fuel-savings app GasBuddy, tweeted on Monday.
“[W]e will see precipitous declines in the next week or two as stations continue to sell through higher priced inventory before slowly lowering their prices. It’s not impossible given the conditions that price wars, where stations lower their price significantly, could emerge as stations now have considerable room to lower prices,” GasBuddy noted on Monday.
Still, if oil prices resume their rally, the trend of lower gasoline prices could reverse, GasBuddy’s De Haan told Bloomberg.
By Tsvetana Paraskova for Oilprice.com
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