In the last weeks, the price of gasoline has fallen almost to the levels of last February, before the start of Russia’s invasion of Ukraine, a saving that is already felt in the pockets of the Americans.
However, it looks like the price could drop further towards the holiday season and the last few days of the year: GasBuddy projected that the average cost per gallon at the pump could fall below $3 dollars.
“People are realizing that they could back to spending $50 to fill up your tank instead of $80,” Emma Rasiel, a professor of economics at Duke University, told the daily. The Washington Post.
Last June, the price of gasoline hit an all-time high, exceeding $5 a gallon on average nationwide, just as inflation was at its highest point.
However, while the price of gasoline has fallen significantly, the prices of other products have not declined evenly and there is no indication that this time of more affordable fuel is bringing down the cost of other things.
Fuel prices are falling as demand for oil and gas is falling as countries brace for recession, coronavirus outbreaks in China threaten major financial disruption, and drivers reduce gasoline consumption while trying to save money.
Also helping to keep prices low at this time are some key US refiners who they produced gasoline again after months of being out of service for maintenance and repairs.
But an equally important factor is the situation in China, as its leaders signal new coronavirus lockdowns are imminent, sparking protests across the country, the expected economic fallout has turned oil traders bearish.
Only China accounted for 16% of world oil demand last year, according to research firm Capital Economics, which projects its purchase of oil to fall by 1 million barrels a day in December as coronavirus infections spread.
The effect of such a fall on world oil markets is considerable, reducing the price of Brent crude up to $10 per barrel, or more than 10 percent.
Still, while the cost of gasoline for much of last year was a major factor in the inflation that hit the United States and other countries, falling fuel costs are doing little to stabilize the economy.
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Source: La Opinion