Gasoline prices are expected to fall in the coming weeks if the sharp drop in oil prices triggered by the U.S.-China trade war continues.
According to the American Automobile Association (AAA), the national average price of gasoline is $3.21 per gallon, about $0.13 higher than a month ago, but nearly $0.42 lower than a year ago.
Gasoline prices fell $0.05 per gallon in the past week as oil prices fell, partially reversing the recent month-long rise in oil prices due to refinery maintenance and the switch to more expensive summer gasoline.
“With the decline in oil prices last week, it is expected that gasoline prices will continue to fall,” said Andy Lipow, president of Lipow Oil Associates.
“I expect national retail gasoline prices to fall about $0.15 per gallon in the next two weeks, and may fall further thereafter if crude oil prices remain depressed,” he added.
Oil prices closed down for the second consecutive week on Friday, with West Texas Intermediate (CL=F) crude oil futures settling above $61 per barrel. Brent crude (BZ=F), the international benchmark, settled above $64 a barrel.
Crude futures have fallen more than $10 a barrel since President Trump announced his sweeping tariff plan on April 2 and OPEC and its allies decided to increase production in May.
Trump’s 90-day tariff suspension on about 75 countries led to a sharp, brief rebound in oil prices as tariffs on Chinese-made goods have risen to 145%. Traders worry that a trade war with the world’s largest crude importer will curb demand.
“Unless the economic situation improves again, gasoline prices will probably eventually fall below $3 a gallon,” Patrick De Haan, head of petroleum analysis at GasBuddy, told Yahoo Finance. “We’ve never seen such a dramatic change in the status quo, and oil prices are not bullish on the current situation.”
The drop in gasoline prices compared with the same period last year helped ease inflationary pressures in March.
The latest Consumer Price Index data, released Thursday, showed the gasoline index fell 9.8% on an annual basis last month, driving the overall energy index down 3.3% over the same period.
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