The national average price of gasoline in the United States has dipped below the $4 mark for the first time in weeks, with data compiled by GasBuddy from more than 12 million individual price reports across more than 150,000 gas stations revealing that the national average fell by 9 cents from a week ago to $3.97 per gallon, with further drops to $3.65-$3.85 possible in the near future. However, AAA reported the national average at $4.042 per gallon on Monday, down from $4.125 a week ago.
The disconnect comes from different methodologies used by GasBuddy and AAA. While GasBuddy aggregates real-time, user-reported prices, AAA relies on Oil Price Information Service (OPIS) data, which is based on credit card transactions and direct station surveys.
According to GasBuddy analyst Patrick De Haan, retail lag could keep prices at local gas stations elevated due to gas stations which paid high prices earlier. As usual, gas prices continued to show wide variances across the 50 states, with motorists at Louisiana and Ohio paying just $3.684 per gallon compared to $5.837 in California and $5.385 per gallon in Washington State.
The fuel price drop comes as oil prices retreated last week from recent highs amid hopes that a resolution between Washington and Tehran would be reached soon. However, oil prices reversed trend on Monday after Iran re-closed the vital Strait of Hormuz to commercial shipping over the weekend , reviving fears of a collapse in the ongoing ceasefire. Brent crude for June delivery rose 5.6% to trade at 12.20 pm ET on Monday, while WTI crude for May delivery jumped 6.0% to trade at $88.75 per barrel.
Unfortunately for U.S. motorists, the reprieve might be short-lived, with De Haan warning that, “However, that relief may prove fleeting. Oil prices surged in Sunday night trading after Iran re-closed the Strait of Hormuz and President Trump signaled further escalation if Tehran does not come to an agreement. With global oil flows remaining at risk, renewed volatility is taking hold, and the continued back-and-forth is making any lasting resolution increasingly fragile. As a result, gasoline prices are likely to rise again in the days ahead, with diesel expected to follow if disruptions persist, and many of the states that exhibit price cycling could see increases in the next 24-48 hours.”
De Haan’s sentiment is shared by U.S. Energy Secretary Chris Wright who recently warned that gas prices are not likely to fall below $3 per gallon until 2027.
By Alex Kimani for Oilprice.com
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