U.S. gas prices on track to fall below $4 a gallon, experts say
Fuel prices have dropped in recent weeks amid hopes that the midterm elections would increase pressure on the U.S. and Iran to reach a peace deal.
Key points
- GasBuddy's Patrick De Haan expects the national average to drop below $4 a gallon by next week.
- The average stood at $4.06 a gallon on Thursday and early Friday, according to GasBuddy.
- Tom Kloza of Gulf Oil predicts the average will fall below $4 within 10 days.
U.S. gasoline prices are on track to fall below $4 a gallon for the first time since July, according to energy experts. Patrick De Haan, a petroleum expert at price-tracking firm GasBuddy, told CBS News he expects the national average, which GasBuddy put at $4.06 a gallon on Thursday, to dip below $4 by next week. The average was still $4.06 early Friday, GasBuddy said. De Haan also predicted diesel could fall below $6 a gallon by Thanksgiving.
Why prices are falling
De Haan said the recent decline in gas and diesel prices was largely due to market expectations that the U.S. midterm elections would underscore public dissatisfaction with the war in Iran and increase pressure on the Trump administration to strike a deal ending the conflict. "Oil prices have been falling in the run-up to the election," he said. Other factors include increased oil tanker traffic through the Strait of Hormuz, easing constraints on global supply, De Haan said. Brent crude fell below $100 on Thursday for the first time since September, trading at $97.44 by midday, while West Texas Intermediate was at $90.42 a barrel.
Seasonal shifts are also partly responsible, De Haan noted: prices tend to dip in the fall as Americans cut back on road trips and summer travel, and filling stations are already switching to winter-blend gas, which costs less to produce than summer-blend fuel.
Oil prices have been falling in the run-up to the election.
— Patrick De Haan
Station markups and federal steps
Tom Kloza, chief energy adviser for Gulf Oil, predicts the average U.S. gas price will sink below $4 within the next 10 days. He said the profit stations earn per gallon, currently around 75 cents, is larger than usual. "Historically, that is too outsized," he said in an email, adding that a more normal markup would be 40 cents a gallon.
The Trump administration has used various tools to ease gas prices, including expanding access to tax-free red-dyed diesel, opening the door to Russian diesel imports, and waiving the Jones Act, a federal statute requiring goods shipped between U.S. ports to move on U.S.-built, U.S.-flagged and U.S.-crewed ships.
