Gas prices fall below  a gallon for the first time in months

Gas prices fall below $4 a gallon for the first time in months

The national average price of regular gasoline fell to $3.99 a gallon on Thursday, according to AAA.

Gas prices hit a a record high of $5.02 in June as drivers fill up their tanks for the summer travel season. They were also boosted by rising global oil prices as Western countries turned their backs on Russian crude oil following Moscow’s invasion of Ukraine.

But prices at the pump have since fallen by 21% as drivers have moderated spending and fears of a recession threatened to crimp demand. Despite the drop, they remain 25% higher than this time last year.

“The market was nervous at the beginning of the summer. The inventory was very tight,” said Patrick De Haan, head of gasoline analysis at GasBuddy. “But the market was overcooked. It was overbought.”

De Haan said the national average could continue to decline for five to 10 days before settling in the $3.70s or $3.80s. However, he noted that oil prices have started to fall and the typhoon season may disrupt energy supply.

Brian Deese, director of the White House’s National Economic Council, said the drop below $4 is an important development for Americans, translating into $100 less in fuel costs for the average family with two cars.

“That’s a significant savings that people will feel in their lives,” Deese told CNN in a phone interview.

Deese said the White House has been monitoring the price of gasoline and energy supplies “very closely” and added that prices should continue to fall.

“Prices in the market today suggest that we should see the price at the pump drop further,” he said.

“Despite the drop in gas prices during the peak of the summer driving season, fewer drivers increased last week,” AAA said in a Monday press release.

“It’s another sign that, right now, Americans are changing their driving habits in response to higher pump prices.”

Analysts say that the release of emergency oil by the United States has also helped to reduce the price of oil and gasoline. At the end of March, the The White House announced the release of 1 million barrels per day from the Petroleum Reserve Strategy for six months.

US crude oil prices have fallen sharply from a peak of more than $120 a barrel in June to around $92 a barrel on Thursday, helped by an easing global supply crisis.

In a report released Thursday, the International Energy Agency revised its outlook for global oil supplies, because Russia has continued to pump more oil than expected.

“While Russia’s exports of crude products and oil to Europe, the United States, Japan and Korea have decreased by about 2.2 [million barrels per day] since the start of the war, the reorganization of the flow of water to India, China, Turkey and others, as well as Russia’s high demand for the season has reduced the losses,” the Paris agency said.

By July, Russia’s oil production was just 310,000 barrels a day below pre-war levels while total oil sales were just under 580,000 barrels a day, it added.

The release of 180 million barrels of oil from the US Strategic Petroleum Reserve has also helped increase supply.

Matt Egan contributed reporting.