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In recent weeks, drivers have found relief at the pump after gas prices tested their ability to pay upon arrival up to $5 dollars per gallon at all gas stations in the country.
But after the toughest days at the pump, consumers can finally see a little light at the end of the tunnel, after this Thursday, the price average gasoline nationwide fell from $4 dollars and stood, for the first time in months, at $3.99 dollars per gallon, according to AAA.
Although the data is encouraging, the cost of gasoline is still 81 cents higher in compared to what drivers paid a year ago for a gallon of fuel.
Something similar to what happens with general inflation, which although it fell from 9.1% from June to 8.5% in July, in their year-on-year comparisons; the figure remains one of the highest Americans have faced in decades.
Now the question many drivers are asking is if gasoline prices will continue to drop or if this is just a temporary movement, before prices in the pump escalate again.
The answer lies in the oil
There are several factors that have led to gasoline adding 59 weeks down, Among these, many drivers simply decided to stop consuming fuel to save on the purchase of this basic product, that is, the demand decreased.
Also, that the governments carried out emerging measures to curb the escalation of prices, from a historic release of strategic oil reserves, ordered by the White House, until the cancellation of taxes on gasoline in several states.
However, the most important factor in the midst of all this is in the price of oil, which transfers more than 50% of the price that consumers pay at the pump.
According to analysts, in these movements is the key to knowing if prices will continue to fall or climb as they did last March, when the barrel of West Texas Intermediate (WTI) crude reached $130 dollars, the highest levels from 2008.
Oil futures predict a new rise
Oil prices have fallen in recent months since their peak in March and that led to gasoline falling below the floor of $4 dollars per gallon.
However, for analysts, these downward streaks in prices at the pump could be cut in a few days , as the benchmark oil, WTI, recovered more than 5% this week alone.
In addition to this, gasoline futures have also shown an upward performance in the last week, which in total has been 10% of its value.
“The streak of daily declines in the retail price of gasoline is about to end, as crude oil and refined products futures recovered from their recent lows”, warned Andy Lipow, president of Lipow Oil Associates, in a report by CNBC.
In addition to the movements in the futures markets, refineries are reaching the limit of their production and are at the expense of any alteration, such as a natural phenomenon, triggering prices in a few days.
In the midst of this scenario, GasBuddy’s Head of Analysis, Patrick De Haan, considered that the fall in prices will stop within five or ten days.
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