Londres (Trends Wide Business) — Gasoline prices in the US are now cheaper than a year ago, a welcome relief for Americans who have spent 2022 dealing with the worst inflation in decades.
The median cost of a gallon of regular gasoline in the United States is now $3.33, according to the American Automobile Association (AAA). A year ago it cost $3.34.
Average US gasoline prices have fallen 13 cents in the past week and 47 cents in the past month, according to the American Automobile Association (AAA). Credit: David Paul Morris/Bloomberg/Getty Images
In June, the price of gasoline hit an all-time high of $5 a gallon. Since then, it has fallen sharply, as the economic slowdown and concerns about a global recession have helped reduce demand for oil around the world. Average US prices are down 14 cents in the past week and 47 cents in the past month.
“Gas deflation is alive and kicking,” Patrick De Haan, GasBuddy’s head of Petroleum Research, tweeted Wednesday, pointing to rapidly declining gasoline prices in California, where prices have been especially high.
The fall in energy prices could continue to help ease consumer inflation. The US consumer price index posted its lowest annual reading since January in October. November data will arrive next week.
Energy analysts worried that a European embargo on oil shipped by sea from Russia and a new Western price cap on Russian crude could reinject volatility into the market. But for now, oil prices have continued to decline.
Both Brent crude futures, the global benchmark, and West Texas Intermediate, the US price benchmark, have fallen nearly 10% so far this week, reaching their lowest levels of the year.
However, sources of uncertainty remain. The Organization of the Petroleum Exporting Countries (OPEC) decided on Sunday to maintain its current plan of production cuts equivalent to 2% of world demand until 2023. If the group chooses to further limit production, prices could rise again .
Russia’s war in Ukraine also continues to affect the energy market, as does President Vladimir Putin’s response to Europe’s oil embargo and new price cap. If Russia cuts production, which could reduce supply by more than a million barrels a day, prices could also rise.
Also, demand from China could pick up faster than expected now that the country plans to lift restrictions imposed by the coronavirus. Concern about the economic impact of these restrictions has been one of the main reasons for the fall in oil prices in recent months.
