The national average price of a gallon of regular gasoline has fallen below $4 for the first time in months, NPR reported, citing AAA.
The average crossed below $4 on Tuesday and was down to $3.94. Prices have dropped about 40 cents over the past month, with much of that decline in the past two weeks. "Many will assume the election had something to do with it, but that's a myth," Patrick De Haan, head of petroleum analysis at GasBuddy, wrote in his industry newsletter. "For now, it's the seasonal shift, not politics, driving the relief at the pump."
Demand typically eases after summer driving season, AAA notes, because fewer people drive in colder weather. Refineries also finish annual maintenance by late fall, adding a bit more supply. And the blend on the market changes. Summer gasoline evaporates less quickly, producing less smog; the winter blend, which uses more butane, is cheaper and helps engines start in freezing weather. The switch usually happens around Sept. 15. This year, NPR reported, the Environmental Protection Agency and the Department of Energy moved it to Sept. 1, citing prices driven up by the war in Iran.
Cheaper crude, not a return to prewar prices
The bigger driver, said Jorge León, head of geopolitics at Rystad Energy, is the falling price of Brent crude, which was then down to about $90 a barrel. (A separate CNBC report on Thursday said Brent later traded 1.9% higher at $94.48 after President Trump said the United States does not need a deal with Iran; those are different snapshots.) León told NPR more oil has been moving out of the Middle East via pipelines, and traders have responded to intensifying U.S.-Iran diplomacy. That progress "could easily be reversed if the war escalates," he wrote, warning that renewed military action could quickly erase last week's oil-price decline, and with it cheaper gasoline.
Jaime Brito, executive director of refining and oil markets for Dow Jones Energy, cautioned that cheaper crude "does not mean a complete 'normalization'" to prices from before the conflict. Ships that have been taking long alternative routes around the Strait of Hormuz would have to return to normal paths, and refineries would have to rebuild depleted stockpiles, a process that could take months after a lasting peace deal. AAA, NPR noted, also said gasoline prices are still the highest they have ever been at this time of year.