Motorists could soon see U.S. gasoline prices fall below $4 a gallon for the first time since July, energy experts say.
Patrick De Haan, an oil expert with the price tracking company GasBuddy, told CBS News that he expects the national gas average, which the price tracking company estimated Thursday at $4.06 per gallon, to drop below the $4 threshold by next week. He also predicted that diesel could fall below $6 a gallon by Thanksgiving, he said.
The prices of petrol and diesel have both fallen in recent weeks. This decline was largely explained by market expectations that the United States midterm elections That would highlight public dissatisfaction with the war in Iran and increase pressure on the Trump administration to reach a deal ending the conflict, De Haan said.
“Oil prices fell in the run-up to the election,” he said. “My reading is because there was some optimism that these issues would be resolved after the midterm elections.”
Other factors driving down gas prices
Other factors are also putting downward pressure on fuel costs. Tanker traffic through the Strait of Hormuz has accelerated, easing constraints on global oil supplies, De Haan said.
Brent crude, the international benchmark, fell below $100 on Thursday for the first time since September, trading at $97.44 at midday. West Texas Intermediate, the American benchmark, traded at $90.42 per barrel.
The recent drop in gas prices is also partly due to seasonal changes. Prices tend to drop in the fall, when Americans abandon road trips and summer trips, De Haan noted. Gas stations are already switching to winter-blended gas, which is cheaper to produce than summer-blended fuel.
Tom Kloza, chief energy advisor for Gulf Oil, predicts that the average price of U.S. gas will fall below $4 over the next 10 days. The profit gas stations make on each gallon of gasoline sold — currently about 75 cents per gallon — is also larger than usual.
“Historically, it’s too huge,” he said in an email. “A more normal markup would be 40 cents per gallon, meaning that even if futures prices and physical markets hold at current levels, we should see lower prices at the pump for the foreseeable future.”
The Trump administration has used various tools to lower gas prices. This includes expanding access to tax-free red-tinted dieselopening the door to Russian diesel importsand renouncing what is called Jones Acta federal law that requires goods shipped between U.S. ports to be transported on ships built in the United States, flying a U.S. flag, and crewed by a U.S. crew.
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