Motorists are getting a small but welcome break as gas prices take a pause in their steady upward march.
Prices that accelerated with higher demand for gasoline after relaxed COVID-19 restrictions jumped as global energy markets struggled in response to the February invasion of Ukraine by Russia, a major exporter of natural gas. But in the last few weeks, average U.S. prices have stalled and reversed, reaching $5.02 a gallon June 14 and inching down to $4.86 a gallon Thursday, according to the AAA.
“We are seeing wholesale prices trickle down,” said Michael Fox, executive director of the Gasoline and Automotive Service Dealers of America. “We’re not seeing increases like we were.”
He said he checks wholesale prices daily, watching the ups and downs as gas prices trended higher over the past 30 weeks. “By the end of the week the ups won. For the last three weeks the downs won,” Fox said.
The slight, but perceptible price drop is in response to falling demand as motorists change their habits and drive less. In the week that ended June 17, the U.S. Energy Information Administration’s measure of implied demand — products supplied to consumers — declined by about 700,000 barrels a day from the week of June 3, to about 8.5 million barrels a day.
That number rose to 8.9 million barrels for the week of June 24, signaling another possible rise in prices at the pump.
Patrick De Haan, head of petroleum analysis at GasBuddy, said in a blog posting that factors affecting oil prices include action by the Biden administration and G7 countries to launch a price cap on Russian oil.
Gas prices have fallen for the second straight week as the price of oil “has faltered,” he said.
“While prices will be at their highest July 4th level ever, they’ll have fallen close to 20 cents since our peak in early June,” De Haan said. “Motorists should be wary that while the decline could continue for the week ahead, any sudden jolts to supply could quickly cause a turnaround, and risk remains that when the peak of hurricane season arrives, we could see a super spike at the pump.”
To motorists who complain that prices go up quickly, but fall slowly Fox — who expects prices to rise during the July 4 holiday weekend — said transporting gas from storage in New Haven Harbor to tankers and then to gas stations is time-consuming and factors into pricing.
“Prices go up like a rocket and go down like a feather,” he said.
The American Hotel & Lodging Association found in a May survey of 2,210 adults that 90% said they will consider gas prices in deciding whether to travel in the next three months, with 50% saying it will be a major consideration.
In response to high gas prices, 57% of those surveyed said they are likely to take fewer leisure trips, 54% will likely take shorter leisure trips, 44% are likely to postpone travel and one-third of those surveyed are likely to cancel with no plans to reschedule, the industry group said.
