Gas prices have decreased significantly since last summer, with the national average now sitting at $3.54 per gallon compared to $4.47 per gallon a year ago. This decrease is due to a combination of factors, including the Federal Reserve’s battle against inflation, fears of a recession, and the gradual recovery of US oil production. While gas prices are not as low as they were during the COVID-19 pandemic, they are still a clear plus for consumers gearing up for summer driving season.
However, not all states have found relief from high gas prices. For example, in Arizona, the average price of regular gasoline is currently $4.67 per gallon, and in California, it is $4.80 per gallon. While Gasbadi’s head of oil analysis, Patrick de Haan, believes that the national average is unlikely to reach $4 a gallon this summer, hurricanes and an economic recovery are potential wildcards that could drive prices back up. Gasoline and oil inventories are relatively low, leaving the US in a “danger zone,” according to de Haan.
Despite the potential for fluctuation, the containment of gas prices is positive overall. The US is projected to surpass its pre-COVID-19 record for annual oil production this year, providing a countermeasure against production cuts by OPEC and its allies. Additionally, the containment of gas prices is a sign that inflation across the economy is subdued. Nonetheless, while gas prices are cheaper, the cautious sentiment of the economy as a whole means that US consumers are not yet all smiles.