Gas prices have fallen nearly 7 cents a gallon in the past month, bringing some relief at the pump for motorists.
The national average of a gallon of regular gas dropped 5.3 cents last week, according to Gas Buddy’s latest tally, which brings the price to $3.34 a gallon – a decline of 6.9 cents a gallon from a month ago.
AAA reports the price as $3.358, down from $3.39 a week ago and $3.421 in early November.
“The downturn in average gas prices continued to gain momentum last week as oil prices remained at a hefty discount,” Patrick De Haan, head of petroleum analysis for GasBuddy, wrote on its website. “This is largely due to continued anxiety over the omicron variant and because some countries have begun issuing lockdowns, keeping motorists in some countries from consuming as much fuel.”
Oil did rise slightly early Monday, with prices of a barrel of crude rising $2 to $72, but that is well below the peak of $86 reached in October. A resurgent global economy and restrained production has combined to drive prices significantly higher this year, causing pain at the pump and providing grist for politicians railing against inflation. Soaring gas prices have been among the strongest drivers of consumer inflation running at an annual clip of 6.2%.
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De Haan said the inventories of gasoline rose by 4 million barrels last week and now stand about 5% below their five-year average. Sharp price declines have been seen in the Midwest, but they have yet to spread nationwide.
“While the Great Lakes region, the fastest to see prices respond to market fluctuations, is seeing hefty monthly declines approaching 30 cents per gallon, much of the rest of the country is lagging behind,” he said. “But, we will see precipitous declines in the next week or two as stations continue to sell through higher priced inventory before slowly lowering their prices.”
How long the break will last is unclear, as Saudi Arabia announced an increase of 80 cents a barrel in the price of crude oil sold to Asia and the United States. The Saudis, along with other major oil-producing nations, have been sticking with a schedule of increased production levels during a time of surging demand.
But the presence of a new variant of the coronavirus, dubbed omicron, has led to some shutdowns and restrictions on economic activity. That has crimped demand at a time when more supply is coming on the market.
Reports that omicron is so far resulting in mild symptoms lifted markets Monday, with the Dow Jones Industrial Average up more than 550 points in early trading.