Since peaking over $5 per gallon in June, gas prices in the U.S. have fallen by almost 70 cents per gallon over the past month alone, AAA said Thursday. File Photo by Jim Ruymen/UPI | License Photo
Aug. 11 (UPI) -- For the first time in five months, the average cost for gasoline in the United States is below $4 per gallon due mainly to a few reasons -- including more domestically produced oil on the market.
According to AAA, the national average on Thursday was $3.99 per gallon. It's the first time the average has been under $4 since March.
Prices at the pump have been tumbling for about two months after hitting an all-time high -- $5.02 per gallon -- in the middle of June. It's another sign of relief for American consumers as hot-running inflation is showing more signs of waning.
Thursday's national average is 2 cents lower than it was Wednesday, 15 cents cheaper than a week ago and 69 cents less than a month ago, according to AAA. It still remains a bit higher than the average of $3.18 per gallon from a year ago.
Experts say there are three primary reasons for the falling gas prices -- lower demand, less-expensive oil and more domestic oil released by President Joe Biden from the national strategic reserve. Biden's decision to allow the sale of E15 during the summer months has also had an impact on prices.
The chief reason, they say, is the lower cost of oil. The cost of both West Texas Intermediate and Brent Crude have fallen by more than 20 cents per barrel over the past few weeks. Also, demand for gas is down. Data from AAA and the Energy Information Administration says demand is similar to what it was in July 2020, when COVID-19 restrictions were in place.
California has the most expensive gas in the United States, at an average of $5.38, followed by Hawaii ($5.39) and Alaska ($4.95). The least expensive gas is in Texas ($3.49), Arkansas ($3.53) and South Carolina ($3.54), according to AAA. Falling prices have also been seen in other places, including the cost of airfare.
There is more U.S.-produced oil on the mark than usual this summer because President Joe Biden ordered the release of about 180 million extra barrels from the strategic reserve. File Photo by Gary I Rothstein/UPI
Earlier this month, OPEC voted to increase oil production slightly, but it was mostly a symbolic move. The cartel was said to be weighing U.S. demand for more crude against Russia's insistence on keeping prices high to make up for its diminished oil exports amid the ongoing war in Ukraine.
The declining cost of gasoline in the United States is coming, however, at a time of record revenues and profits from energy companies. Exxon and Chevron posted record profits in the second quarter after Biden accused the companies of withholding oil at the expense of consumers.
The president also visited Saudi Arabia in August in an effort to renew relations while pushing for more oil production, although no noteworthy agreements came out of the meeting.
AAA said on Thursday, however, that the cost of gas is still relatively high and that's the chief reason behind an increase in the cost of operating an automobile in the United States.
AAA said that average annual cost has risen to $10,728, or almost $900 per month. That's an increase from $9,666 and $805 per month a year ago.
"Consumers are paying more attention when purchasing a new vehicle since everything is more expensive right now," AAA Director of Automotive Engineering Greg Brannon said in a statement Thursday.
"With the recent increase in fuel prices, more and more people want to know the true costs of owning a car beyond their monthly payment."