Aug 11, 2022 - Economy & Business

Gas prices drop under $4 a gallon

Woodman's in Menomonie Falls, Wis., was ahead of the national curve, with gas just under $4 on July 20.
Woodman's in Menomonie Falls, Wis., was ahead of the national curve, with gas just under $4 on July 20. Photo: Morry Gash/AP

Early this morning, AAA posted the national average price of a gallon of regular gas at $3.990, dropping under the psychological barrier of $4.

Why it matters: The falling gas price is a huge relief for consumers — and for Democrats, since Republicans plan to hammer rising prices in midterm campaigns.

  • It's the first time gas prices have retreated to below $4 a gallon since early March. They hit a record $5.016 on June 14.

The big picture: Both crude oil and wholesale gasoline prices have rolled over since June, signaling that the worst of the recently elevated energy costs may have passed, Axios' Matt Phillips writes.

  • The global benchmark Brent crude, which reached a high of $139 per barrel after the Russian invasion of Ukraine, was $92 on Wednesday.

Zoom in: Retail gas prices have fallen almost everywhere over the past month, with the Midwest and South seeing some of the steepest drops.

  • Ohio had the largest fall ($1.36). Hawaii had the smallest (21¢).

Zoom out: Inflation expectations are also falling. Inflation was flat in July, driven lower by a sharp fall in energy costs.

Reality check: Consumer inflation is still up 8.5% over the past year.

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