Hello, Daily Money readers. Jayme Deerwester back with you this Thursday.
Months after gasoline prices hit all-time highs, drivers are feeling relief at the pumps with the national average below $4 a gallon for the first time in five months.
The average cost of a gallon of regular gasoline in the United States is $3.99, according to AAA. Although still higher than last year’s prices at $3.18, this is a significant drop from when prices peaked at $5.01 in mid-June.
“It’s kind of like a very simple roller coaster ride because we went up and now we’re coming back down,” AAA spokesman Andrew Gross told USA TODAY. “When things go up really fast, they also tend to go down really fast.”
Why gas prices are falling
Gross says three things factored into the price crash: the cost of oil, there’s less demand for gas, and “a pretty good little band-aid” in the Biden administration releasing oil from the strategic reserve of oil.
The main driver of the cost of gas is the price of oil, Gross added. U.S. crude oil hit $93.18 a barrel, while international standard Brent crude was $103.81 on Wednesday, according to the U.S. Energy Information Administration, both of which have fallen at least 20 cents a barrel since the 4th of July weekend.
However, Gross says what could really “turn the apple basket upside down” is the upcoming hurricane season.
“Hurricanes inevitably pass through where there is oil production and refining. That’s where you don’t want them to go, but they’re like magnets, they could roll in there,” he said. “We just can’t make those predictions.”
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🎧 Background music 🎧
Today I’m going with Danielle Dax’s cover of the trippy Beatles classic “Tomorrow Never Knows”. Because uncertainty is scary but a little less when it has a good rhythm.
“Play the game ‘Existence’ until the end of the beginning, of the beginning.”
About Daily Money
Each weekday, The Daily Money provides the best consumer news from America TODAY. We break down the financial news and provide the TLDR version: how Federal Reserve, government and corporate decisions affect you. It even comes with its own Spotify playlist. It contains almost all the songs listed here.
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