Gas prices have declined over the last month to the lowest level since May, and Americans are set to spend $206 million less on gasoline today compared to when prices hit a record high in mid-June, according to industry tracker GasBuddy.
“We’re in the midst of some of the steepest declines in quite some time,” Patrick De Haan, head of petroleum analysis at GasBuddy, told Yahoo Finance Live (video above). “We’re seeing big declines across many areas of the country and that should continue.”
De Haan predicts the national average could decline to $4.39 per gallon by the end of the week and below $4 per gallon before the end of summer.
“For at least a couple of weeks, barring any unexpected disruptions, it is possible that the national average could eventually fall below the $4 a gallon mark by mid-August,” De Haan noted. “We’re in the early- to mid-point of this game of falling prices.”
Gas prices in the U.S. have fallen 49 cents in the past month to a national average of $4.49 per gallon as of July 19, according to AAA, driven in part by concerns over a potential recession, growing inventories, and reduced demand.
“We are seeing a level of demand destruction,” De Haan said. “I won’t say it’s significant, but it is noticeable. In addition, on the supply side, we have seen an improvement as refineries boost production.”
Texas recently became the second state to see average gas prices fall to under $4 per gallon, joining South Carolina. GasBuddy now observes 35 states with at least one station selling gasoline for $3.99 per gallon or less. The lowest price in the U.S. is currently in Virginia, where two stations are selling gasoline for $3.25 per gallon.
More relief at the pump may be on the way.
“We could see prices staying under the $4 a gallon mark in the final quarter of this year,” De Haan said. “The biggest question is will the economic concerns continue or could we see a potential improvement in the economy.”
Seana Smith is an anchor with Yahoo Finance. Follow her on Twitter at @SeanaNSmith.
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Source: finance.yahoo.com