scorecardGas prices are still tanking — and are on track to fall below $4 per gallon by mid-August
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Gas prices are still tanking — and are on track to fall below $4 per gallon by mid-August

Ben Winck,Madison Hoff   

Gas prices are still tanking — and are on track to fall below $4 per gallon by mid-August
PolicyPolicy2 min read
Consumers fill up at a Shell gas station July 13, 2022, in Miami Beach, Fla.    Marta Lavandier/AP Photo
  • The average US gas price is on track to dip below $4 in August, according to GasBuddy.
  • More than 55,000 stations across 17 states are already selling gas below that level.

As the gas-price recovery pushes into its second month, Americans could soon be paying prices that were commonplace just 10 years ago.

The average price for a gallon of gas in the US hit $4.28 on Thursday, according to AAA data. That's down from the mid-June peak of $5.016. Even more encouragingly, Thursday marks the 43rd consecutive day that gas prices have fallen. That's in sharp contrast to the several-month rally that kicked off in November 2020.

The steady downtrend could pass a promising level in just a few weeks. The national average gas price is on track to hit $3.99 in early August, Patrick De Haan, head of petroleum analysis at GasBuddy, said in a Thursday tweet. The Wednesday drop of 4.5 cents was the largest on record, he added. That helped pull forward the $3.99 forecast by about one week.

More than 55,000 stations across 17 states already boast sub-$4 prices, according to GasBuddy. The most popular price in the US is now $3.99 per gallon, with $3.89 and $3.79 following close behind.

Averages in Texas and South Carolina have already fallen below the $3.80 level, according to AAA. Mississippi, Tennessee, and Georgia are likely to join that cohort in the coming weeks.

The weeks-long decline signals the next inflation report could show some cooling. Gas prices count for much of the price growth Americans experienced over the past year. Energy prices are broadly up 42% in the year through June, and gas costs are roughly 60% higher than they were in June 2021. Rising food, car, and transportation prices have also played major roles in lifting inflation to four-decade highs, but plunging gas prices could be the first component to pull year-over-year price growth from its peak.

A few factors threaten the downtrend. Gas demand rebounded to 9.25 million barrels per day from 8.52 million last week, according to the Energy Information Administration, suggesting lower prices could be drawing more drivers onto roads. If demand continues to rise, price declines could slow or even reverse course entirely.

Supply has fallen under pressure as well. Total domestic gasoline stocks fell to 225.1 million barrels from 228.4 million last week. Though the drop is fairly small, a persistent decline for domestic stocks could worsen the supply-demand imbalance that drove gas prices higher in the first place.

The months-long slump in crude prices is also showing signs of slowing. West Texas Intermediate crude oil traded slightly higher to $97.49 per barrel in the Thursday session. That's up from the low of about $95 seen earlier in July, and recent sessions saw crude futures trade sideways. If oil futures swing higher, that will put more upward pressure on pump prices.

Gas prices are set to extend their decline through the end of the month, but as demand edges higher and travel season continues, the path to $4 gas will likely be a bumpy one.