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U.S. Gas Prices See Biggest One-Day Drop Since 2008
July 8, 2022
Gasoline prices in the US just saw the biggest single-day drop in nearly 14 years.
The nationwide average for U.S. pump prices dropped 3.1 cents overnight, falling to $4.721 per gallon, according to AAA. That is the largest daily drop since December 2008.
Although 3 cents may not amount to much for drivers, prices at the pump have been falling for the past 24 consecutive days, the longest stretch of declines since April 2020, when the economy was largely shut down due to the coronavirus pandemic.
Despite the recent retreat in prices, the average price at the pump remains about $1.60 higher than a year ago, and there are 10 states where the statewide average remains above $5 per gallon.
Analysts expect that prices will continue to fall in the coming weeks, potentially declining nationwide by another 25 to 50 cents, and while this is welcoming news for drivers, is a worrying sign for the broader economy.
Crude oil prices have fallen precipitously in recent weeks, driven by fears that the economy is heading for a recession. The U.S. benchmark for oil, West Texas Intermediate crude, has fallen below $100 per barrel for the first time since May, down from a recent peak of $123.70 per barrel.
A number of factors could reverse this trend and send oil prices skyrocketing again. Positive economic data could assuage recession fears, a major hurricane in the gulf could take refineries off line, or most disastrously, Russian could cut off its oil exports. Analysts at J.P. Morgan recently estimated that Russia halting exports would lead to a “stratospheric” increase in oil prices, potentially as high as $380 per barrel.
