American motorists can expect some minor relief, with gasoline prices set for their first weekly drop in more than two months amid declining oil prices and a dip in consumer demand.
“Oil really tumbled today — the market is so headline driven,” said Andrew Gross, a spokesperson for auto club AAA, which tracks fuel costs. “There is a lot of worry about global recessions, which will cause a big slowdown.”
The national average for a gallon of regular unleaded stood at an even $5 on Friday, three days after hitting its all-time peak of nearly $5.02, according to AAA, which updates the figure daily.
A drop in the price of crude oil, coupled with the first weekly dip in demand after three weekly increases, should offer at least a short-term respite from record-high gas prices, Gross told CBS MoneyWatch.
“By the time Tuesday rolls around, we could be back under $5 and even where we were the week before,” he said before cautioning “who knows what the weekend will bring.”
According to Patrick De Haan, an analyst at GasBuddy, the national average fell to $4.99 a gallon on Friday, with gas prices set for their first weekly drop in nine weeks.
“Based on markets at this moment — they can and do change — the national average could fall to $4.55 to $4.75 a gallon in the weeks ahead unless trends shift,” De Haan tweeted on Friday.
White House has few levers to pull
People tend to mistakenly attribute the cost of gas to the U.S. president, when in reality there’s a limit to what the White House can do to lower fuel prices, said Gross, who noted that about 60% of the price at the pump is dictated by the cost of crude. “The local gas station sets its price, and there are all sorts of factors, including location and how many people are working there.”
U.S. Secretary of Energy Jennifer Granholm said earlier in the week that the Biden administration is working to ease the economic, including releasing 1 million barrels a day from the . Still, “there’s not a quick fix,” she added.
Another potential White House move could help boost U.S. production, but would not bring immediate relief, analysts noted.
“We expect the administration could activate the Defense Production Act for the expansion of refinery capacity, but any market/consumer impact from these efforts will be a longer-term consideration,” Raymond James Equity Research analysts Ed Mills and Chris Meekins said in a report.