U.S. gas prices dip as oil drops below $100 a barrel

Americans can expect a relief measure for record gas prices as oil drops to less than $ 100 a barrel, analysts said.

US benchmark crude rose 49 cents to $ 96.93 a barrel on Wednesday. a drop of about $ 130 a barrel last week, its highest level since 2008. Oil prices are falling as leaders in Russia and Ukraine discuss a possible ceasefire, according to investment bank UBS.

“The move reflects a decline in fears of further supply disruptions following ceasefire talks between Russia and Ukraine,” UBS analysts said in a report. “There were also indications that while energy companies in Europe continue to avoid Russian oil, India has bought Russian crude at a discount, which could mitigate the impact on global supply of import bans in the US. , the United Kingdom and Canada “.

Nationwide, a gallon of normal gas costs an average of $ 4.30, a sharp rise from $ 3.51 in February and $ 2.87 a year ago, according to AAA. Drivers in some states, including Alaska and California, pay up to $ 4.73 and $ 5.77, respectively. Higher prices have further strained the portfolios of American households that are already struggling with rising inflation.

But gas prices are now falling slightly in several U.S. cities, and the fall should soon be seen at more U.S. gas stations, according to Patrick De Haan, head of gas analysis at GasBuddy.

“It’s only a matter of time before we sink below the $ 4 per gallon average, as long as those levels are maintained.” he he tweetedalthough he noted that another leg up in oil prices would increase fuel costs.

For the most part, oil prices are on par with gas prices: as oil prices rise, so do pump prices.

“It should be noted that the cost of oil represents about 50% of what drivers pay at the pump,” AAA spokesman Andrew Gross said in a statement Monday. “This war is shaking an already narrow world oil market and making it difficult to determine whether we are close to a maximum for bomb prices or whether they continue to rise. It all depends on the direction of oil prices.”

Gas prices fell to an average of $ 1.94 per gallon in April 2020 as COVID-19[feminine[feminine the pandemic was consolidating. But fuel costs began to rise sharply in the fall of that year as the U.S. economy recovered and demand rose. By December 2021, gas had risen to $ 3.40, while the strongest inflation in four decades increased the cost of everything from food to rent.

This year, oil and gas costs continued to rise after Russia rallied troops on the border with Ukraine. Prices rose after Russia launched a major invasion on February 24 amid concerns that the conflict could disrupt global crude oil supplies and trigger economic sanctions.

Prices rose further last week after the US announced in ban on Russian oil imports. Russia is one large crude oil exporter, which accounts for about 12% of the world’s supply. Any disruption in these exports is likely to increase gas prices for consumers almost everywhere.

Despite the pain in the bomb, a recent CBS News poll found that 63% of Americans said they support the Biden administration’s sanctions on Russia, including a ban on Russian oil, even if this means that gas prices have to rise.