Brandon Bell | Getty Images Prices at the pump have retreated from unprecedented June levels, but remain stubbornly high. Some relief could be seen. U.S. gasoline futures have fallen more than 11 percent this week, after oil prices fell as recession fears fueled worries about falling demand. The national average for a gallon of natural gas was $4.75 on Thursday, according to AAA. That’s down from the record high of $5,016 set on June 14. But prices are still $1.62 higher than this time last year. California has the highest state average at $6,185. The state’s Mono County costs an average of $7.224 per gallon. South Carolina’s $4,257 average is the lowest in the U.S. Patrick DeHaan, head of oil analysis at GasBuddy, said the national average could fall to between $4 and $4.25 by mid-August, barring a rise in oil prices. West Texas Intermediate crude, the benchmark for US oil, fell below $100 a barrel on Tuesday for the first time since mid-May. Oil makes up more than half of the cost of gasoline, with refining costs and taxes, among other factors, affecting prices. On Thursday, WTI traded around $99.51 a barrel, while gasoline futures were 1.2% higher at $3.27 a gallon. Prices at the pump tend to rise faster than they fall as gas stations try to turn a profit in a highly competitive business. “Never [oil] Prices are trending up, stations are typically 2-5 days behind price increases until the uptrend stops,” noted De Haan. “This means that for weeks they may be delayed in raising prices. When prices finally fall, they lower prices slowly to recoup the margins since prices went up. The longer and steeper the uptrend, the slower stations are likely to lower prices when relief finally comes,” he added. But there were some positive signs of relaxation. De Haan counted 2,535 gas stations with prices below $3.99 on Thursday. Although this is a small fraction of the 145,000 gas stations in the country, De Haan expects the number could double or triple in the next week or so. Record prices have been a major contributor to runaway inflation and a headache for the Biden administration ahead of November’s midterm elections. President Joe Biden called on Congress in June to temporarily suspend the federal gas tax, but such a move has garnered little support from lawmakers. Looking ahead, some Wall Street firms believe oil prices will regain past highs, which would mean only temporary relief at the pump. Goldman Sachs is calling for Brent crude, the international oil benchmark, to reach $140 this summer. On Thursday it traded at $101.81. Meanwhile, Citi has been an oil bear for some time and on Tuesday said Brent could reach $65 by the end of the year if the economy slips into recession. Other factors that could drive gas prices higher again include a hurricane or any refining-related issues, with refineries already operating near maximum capacity. Andy Lipow, president of Lipow Oil Associates, predicts the national average will drop to $4.50. Without major disruptions, prices could fall even further. “If we can get through the next six weeks without a major hurricane, we’re looking at $4.40,” he said.
