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Prices of gasoline in the United States stopped falling after a streak of 99 days, short of the century mark

BusinessPrices of gasoline in the United States stopped falling after a streak of 99 days, short of the century mark

On Wednesday, a streak of 99 consecutive days in which the average national price of gasoline in the United States fell came to an end. This is an indication that the impact of declining fuel prices, which have lately helped to limit overall inflation, may be beginning to wane.

The current drop has only partially reversed a sustained run-up in gas costs, which increased following Russia’s invasion of Ukraine in February and continues to roil consumers. The rise in gas prices was exacerbated after Russia’s invasion of Ukraine in February. The question of what action to take in response to inflation caused by rising energy prices has become not only a political problem for Vice President Joe Biden but also a policy challenge for the Federal Reserve, which is widely anticipated to announce yet another significant increase in interest rates on Wednesday after the conclusion of its meeting.

According to AAA, the price of a gallon of regular gasoline increased by seven-tenths of a penny, bringing it to a new national average of $3.68. This was an improvement from the previous month’s price of $3.90 a gallon, which was $3.19, but it was still an overall decrease. In June, the price of a gallon of gas reached its all-time high, which was slightly over $5.

The price of gasoline purchased at the pump is mostly influenced by the price of oil on a worldwide scale. The price of West Texas Intermediate crude oil, which is used as a benchmark in the United States, climbed above $120 per barrel in the middle of June but has since fallen to around $86 per barrel due to concerns that a recession will reduce the amount of demand as well as signs that increased supply is coming to market.

Even though gas prices in the United States are still higher than they were for several years prior to the recent spike, the drop below $4 per gallon in August was seen as a political win for President Joe Biden. Mr. Biden has been under pressure to tame stubbornly high inflation, and he has released oil from strategic reserves, urged oil-producing countries to pump more crude, and chided oil companies for what he considered profiteering by the oil industry. The current president and his advisors have made a great deal out of the recent drop in gas prices, which was one of the bright spots in the most recent inflation report, which showed uncomfortably quick rises in prices for a wide variety of other products and services.

Allen Good, an equity analyst at Morningstar, was recently quoted as saying, “I’d expect over the next several weeks a rebound in prices.” According to him, he anticipates that the price of a gallon of petrol would “stay pretty high” in the next months, falling somewhere between $3.50 and $4.

Recently, the daily decreases in the price of gasoline have reduced to minuscule increments, only fractions of a penny. Futures trading shows that investors anticipate oil and gasoline prices to continue their downward trend over the next year, although the prices of these commodities are volatile and sensitive to the influence of global economic and political forces: It’s possible that prices may go back up just as rapidly as they fell. One of the variables that has lately been dragging down demand is the fact that individuals have been changing their driving patterns as a reaction to high costs. These driving habits may shift again if prices are able to find a more stable equilibrium.

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