Gasoline prices are expected to play catch-up — in a good way — over the coming weeks, reflecting tumbling oil futures.
The national average for gasoline stood at $3.16 per gallon on Monday, according to AAA data. That’s about $0.02 higher than a week ago but more than $0.40 lower than the same time last year. More expensive summer blends and refinery maintenance sent prices at the pump seasonally higher in March.
While prices eased somewhat in April, a bigger impact of falling oil prices is yet to be seen.
“Given gasoline inventories declining, we haven’t seen gas prices drop nearly as much as oil prices,” GasBuddy head of petroleum analysis Patrick De Haan told Yahoo Finance. “But with refinery maintenance season wrapping up, I do think there’s becoming a solid chance that we could see the national average below $3 per gallon this summer as inventories will likely soon start to grow.”
At least 23 states already are seeing an average below $3 per gallon, including Texas and the rest of the Gulf Coast, the Midwest, and even parts of New England, like Rhode Island, Maine, and New Hampshire.
On Monday, oil prices tumbled as much as 2% over expectations of a boost in supply while trade war-sparked demand worries linger.
West Texas Intermediate (CL=F) futures fell to around $57 a barrel while Brent crude (BZ=F), the international benchmark, also dropped to near $60 per barrel.
Prices declined after members of the Organization of Petroleum Exporting Countries on Saturday agreed to boost production levels next month by the same increase as in May. Wall Street anticipates the cartel will likely raise output in July.
“Our key conviction remains that high spare capacity and high recession risk skew the risks to oil prices to the downside despite relatively tight spot fundamentals,” Goldman Sachs analysts wrote on Sunday night.
In April, crude oil prices capped their worst monthly drop since November 2021 amid fears over a global economic downturn and demand shock from President Trump’s tariff policy.
President Trump has made lower energy costs a cornerstone of his administration.
“While the recent de-escalation in trade talks has reduced the probability of a bear case, the ‘Trump put’ does not extend to energy, as the administration continues to prioritize lower oil prices to manage inflation,” JPMorgan analysts wrote last week.
Ines Ferre is a Senior Business Reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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