US gas prices have dropped below $4 a gallon for the first time since March, GasBuddy says

Gas prices have surged this year as oil prices have risen roughly 50%.

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• Average US gas prices have fallen below $4 a gallon for the first time since March, according to GasBuddy.
• Falling oil prices, driven by recession fears, strategic releases, and lower demand, have caused the drop.
• However, prices could soon rise again as supplies remain tight, with Goldman Sachs expecting a rebound in the coming months.

Average US gasoline prices have dropped below $4 a gallon for the first time since March, according to fuel cost tracking company GasBuddy.

Gas prices fell to $3.99 a gallon on average on Tuesday, GasBuddy said, more than 20% below the record high of $5.03 touched in June.

The drop has been driven by a fall in oil prices, which have tumbled more than 20% from their June highs as traders have bet that a major slowdown in global growth will slash the demand for energy in the coming months.

WTI crude, the US benchmark oil price, traded at below $90 a barrel Wednesday, almost 30% below its June high.

A slew of other factors have also contributed to the fall in oil and gas prices by crimping demand or boosting supply, analysts say. They include an increase in refinery capacity, President Joe Biden's releases from strategic oil reserves, and lower-than-expected demand from US drivers.

According to AAA, whose measure is the most closely watched, gas prices stood at $4.01 a gallon Wednesday, down from a high of $5.016 in June.

"We've never seen anything like 2022 at the pump, highlighted by once-in-a-lifetime events including the ongoing Covid-19 pandemic, which caused myriad imbalances, exacerbated by Russia's war on Ukraine," said Patrick De Haan, head of petroleum analysis for GasBuddy.

"As a result, we've seen gas prices behave in ways never witnessed before, jumping from $3 to $5 and now back to $3.99."

Yet De Haan added: "While the recent drop in gas prices has been most welcomed, the issues that led to skyrocketing prices aren't completely put to bed."

Goldman Sachs said this week that it expects gas prices to pick back up to around $4.35 a gallon in the fourth quarter and to average $4.40 in 2023. The bank said global supplies of oil are still running relatively low, and argued that demand from US drivers is likely to rise after showing signs of weakening.

Despite the fall in prices, gasoline is still much more expensive than in previous years. The average price was roughly $3.20 a gallon in August 2021, and around $2.15 in August 2020.

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