Oct. 24 (UPI) — Fears of a global recession and a White House decision to tap further into the nation’s strategic oil reserves has led to a swift decline in consumer gasoline prices, AAA said Monday.
The travel club on Monday put the national average retail price at $3.79 for a gallon of regular unleaded gasoline. That’s nearly 10 cents per gallon less than at this same time last week.
Andrew Gross, a spokesperson for AAA, said fears of a recession and the recent decision by U.S. President Joe Biden to keep drawing oil out of the nation’s Strategic Petroleum Reserve helped bring crude oil price slower.
“This will help take the pressure off pump prices, benefiting drivers and their wallets,” he said.
Crude oil prices are the dominant factor that determines what consumers see at the pump. Brent crude oil, the global benchmark for the price of oil, was trading at around $91per barrel on Monday. It was closer to $98 per barrel in early October in response to a decision from the Organization of the Petroleum Exporting Countries and their non-member state allies – a group known as OPEC+ – to significantly lower their production quotas come November.
Several investment firms believe a return to $100 oil is imminent given the European Union’s looming moratorium on waterborne crude oil deliveries from Russia. The amount of oil that will come out of the SPR, meanwhile, is a drop in the bucket compared with global demand for oil.
Retail gasoline prices peaked this year at about $5 per gallon. But looming fears of a severe global recession are putting something of a ceiling over the price of oil for the time being, bringing relief to consumers.
Better gas mileage too could be limiting demand, which would help with prices. AAA said domestic gasoline demand is about 1 million barrels lower than it was at this time last year.
“If demand remains low and oil prices don’t spike, pump prices will likely keep falling,” the club stated.
Due to state taxes, drivers in California are facing the highest prices in the continental United States at $5.75 per gallon. Texas and Georgia are tied for the lowest price at $3.20 per gallon.
The U.S. Energy Department in a monthly report for October said it expects the national average retail price for a gallon of gasoline to hover around $3.80 for the rest of the year and dip to $3.57 per gallon in 2023.
