Average Gas Price Falls Back Below $ 5 A Gallon — And Could Keep Dropping

Topline

The average price for a gallon of regular gasoline in the US fell to just under $ 4.99 on Saturday, according to AAA, marking the first weekly decline in nine weeks as oil prices have fallen back from multi-year highs.

Key Facts

The average gas price hit $ 5 a gallon in the US for the first time one week ago, peaking on Tuesday at around $ 5.02.

Prices fell the fastest in Northeastern and Mid-Atlantic states, led by more than 4 cent declines on average over the past week in New Jersey and Maryland.

Prices also fall quickly in places where gas is most expensive, like the San Francisco Bay area and Chicagoland.

Gas in San Francisco is now $ 6.58 a gallon on average, down from $ 6.64 on Monday, while the average price in the Chicago metro area is around $ 5.87, down from a high of $ 5.92 last week.

Georgia continues to have the lowest gas prices in the nation, on average $ 4.48 a gallon, which is a slight rise from $ 4.47 a gallon there one week ago.

Key Background

The Federal Reserve’s decision this week to hike interest rates by 75 basis points to tamper inflation shook oil markets, with prices falling more than 6% on Friday alone. Investors fear interest rate hikes could help push the economy into a recession, dampening oil demand. The price of US benchmark West Texas Intermediate closed below $ 110 a barrel, after trading at more than $ 123 earlier in the week.

What To Watch For

Analysts appear divided about whether the recent oil price decline is a sign of a broader sell-off or if a nearly seven month-long surge in prices will continue. Patrick De Haan, GasBuddy’s head of petroleum analysis, tweeted Friday that “the national average could fall to $ 4.55- $ 4.75 / gal in the weeks ahead unless trends shift.”

Further Reading

As US Gas Prices Top $ 5, Here Are The States Where It’s Most Expensive And Cheapest (Forbes)

Fed Authorizes Biggest Interest Rate Hike In 28 Years, As Experts Worry Its Fight Against Inflation Will Spark Recession (Forbes)

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