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.

The U.S. crude oil index fell 6% on Tuesday to $ 96.84, down from nearly $ 130 a barrel last week, its highest level since 2008. Oil prices are falling while leaders in Russia and Ukraine are discussing a possible ceasefire, according to the 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 US import bans. , the United Kingdom and Canada “.

Gas prices are now falling in several U.S. cities, and the drop will soon appear on more U.S. gas stations, according to Patrick De Haan, head of oil 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 tweeted.

That would mark a significant drop in the average $ 4.32 per gallon Americans have been paying over the past two weeks, 84 cents more than a month ago, according to GasBuddy. Some states, including Alaska and California, pay up to $ 4.73 and $ 5.75, respectively, according to AAA. Higher prices have put a strain on the portfolios of American households that are already struggling with rising inflation.

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 to these exports is likely to increase pump prices for consumers almost everywhere.

However, a recent CBS News poll found that 63% of Americans support the Biden administration’s sanctions on Russia, including a ban on Russian oil, even if that means gas must increase.