After a relentless month's long climb that saw gas prices hit record highs, U.S. national average gas prices have plummeted so much that Americans are now paying less for gas than they were at this time a year ago.
According to the AAA, the national average price for a gallon of regular petrol now stands at $3.329 compared to $3.343 a year ago and $3.804 just a month ago.
Gas prices may actually have hit that milestone days ago, with Gas Buddy and AAA data slightly diverging. On Monday, GasBuddy data compiled from more than 11 million individual price reports covering over 150,000 gas stations across the country showed that gas prices were actually lower than where they sat 12 months ago.
"For the first time in 670 days, the national average price of gasoline has fallen below its year-ago level, dropping for the fourth straight week to its lowest level since January," said Patrick De Haan, head of petroleum analysis at GasBuddy.
"Every state has again seen average gasoline prices drop in the last week, and it remains very possible the national average could fall under $3 per gallon by Christmas. There has also been a drop in diesel prices, which this week will fall back under $5 per gallon, and could soon thereafter fall to their lowest level since March," de Haan added.
Diesel prices are also falling, having declined 15.4 cents in the last week and now stands at $5.000 per gallon as per AAA. However, diesel prices are still $1.388 cents higher than a year ago.
There are still some concerns, though, with GasBuddy noting uncertainty ahead as the price cap on Russian oil kicks in, with retaliation by Russia by holding back supplies and/or OPEC+ cutting production even deeper, which is likely to lead to higher crude prices.
So far, recession fears have remained a steady undercurrent in the oil markets recently for much of the current year, as have the tight supply situation that exists in the energy markets overall.
The International Monetary Fund has said that the world economy was headed for "stormy waters" as it downgraded its global growth projections for next year and also warned of a harsh worldwide recession if policymakers mishandled the fight against inflation. Low demand by China due to strict Covid-19 measures have also helped to subdue oil prices.
By Alex Kimani for Oilprice.com
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Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com. More