The national average price for regular gasoline fell to $3.99 a gallon Thursday, according to the AAA.
But prices at the pump have since fallen 21% as drivers cut spending and fears of a recession threatens to dampen demand. Despite the decline, it is still 25% higher than the same period last year.
“The market was panicking at the start of the summer. Inventories were very tight,” said Patrick de Haan, head of petroleum analysis at GasBuddy. “But the market got too much. There was overbought.”
De Haan said the national average could continue declining for the next five to 10 days before stopping at $3.70 or $3.80. However, he noted that oil prices are beginning to rebound from their recent lows and that hurricane season may disrupt energy supplies.
The drop to less than $4 is an important development for Americans, said Brian Dies, director of the White House National Economic Council, and translates into $100 less in fuel costs for a typical family with two cars.
“This is a meaningful savings that people will feel in their lifetime,” Dess told CNN in a phone interview.
Dess said the White House is following gasoline and energy supply prices “closely” and added that prices should continue to slide.
“Pricing in the market today suggests that we should see prices at the pump go down a bit more,” he said.
“Despite the continued decline in gas prices during the peak summer driving season, fewer drivers were refueled last week,” the American Automobile Association said in a news release Monday.
“It’s another sign that Americans are currently changing their driving habits to deal with higher pump prices.”
US crude oil prices have fallen sharply from a peak of over $120 a barrel in June to around $92 a barrel on Thursday, buoyed by the easing of the global supply crisis.
In a report released Thursday, the International Energy Agency revised its forecast for global oil supplies, in part because Russia continued to pump more oil than expected.
While Russia’s exports of crude and oil products to Europe, the United States, Japan and Korea decreased by about 2.2 [million barrels per day] Since the start of the war, the diversion of flows to India, China, Turkey and others, along with seasonally high Russian domestic demand, has mitigated upstream losses,” the Paris-based agency said.
It added that by July, Russia’s oil production was only 310,000 barrels per day below pre-war levels, while total oil exports were down by only 580,000 barrels per day.
– Matt Egan contributed reporting.