Why Are Gas Prices Actually Plummeting? It's NOT Biden

By Emanuel Eisen | Monday, 08 August 2022 05:15 AM
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Views 6.8K
Why Are Gas Prices Actually Plummeting? It's NOT Biden

Gas prices have been falling since mid-June as demand has dropped to levels not seen since the early days of the pandemic, according to AAA.

Prices have continuously reduced since June 14, when the average price hit a record high of $5.01 per gallon in the U.S.

On Thursday, the national average price for a gallon of regular gasoline dropped eight cents to $4.13.

New data from the Energy Information Administration (EIA) shows that gas demand fell from 9.25 million barrels per day to 8.54 million per day last week.

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That’s 1.24 million barrels per day lower than last year and “in line with demand at the end of July 2020,” when there were widespread virus-related limitations and fewer people were hitting the road, according to AAA.

“Despite the steady decrease in pump prices, drivers appear to still be altering their driving habits to contend with higher-than-usual prices,” AAA spokesperson Andrew Gross told FOX Business on Thursday.

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The latest demand figures bolster a recent AAA survey that showed 64% of drivers had changed their driving habits or lifestyle since March to offset the high prices at the pump.

Nonetheless, there may be some good news for motorists.

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Recently, crude prices have fallen as concerns of weaker gasoline demand continue.

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According to AAA, if gasoline demand is still low and crude prices don’t spike, pump prices are likely to continue falling.

Even though the Organization of the Petroleum Exporting Countries (OPEC) and its allies, further known as OPEC+, plan to increase output by just 100,000 barrels a day in September after increasing output by 648,000 barrels per day in July and August, it’s unlikely to have a considerable impact on price, according to AAA’s report.

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“The slight increase is unlikely to have a significant pricing impact, especially if demand continues to decline,” AAA announced.

Meanwhile, President Biden’s trip to Saudi Arabia was regarded as a failure by analysts after oil-producing states declared Wednesday that they would boost output by just 100,000 barrels a day beginning next month — a drop in the bucket compared to America’s vast energy needs.

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The Saudi-led Organization of Petroleum Exporting Countries and its allies declared the modest increase in supply after a policy meeting held through videoconference.

The Biden administration had held out wishes that its diplomatic overtures to the de facto Saudi ruler — Crown Prince Mohammad bin Salman — would yield a bigger boost in supply.

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Americans consumed an average of 19.78 million barrels of oil per day in 2021, according to the US Energy Information Administration — meaning Wednesday’s production increase would meet between seven and seven-and-a-half minutes’ worth of nationwide demand.

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