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The Downtrend in Gas Prices Continues, There's Still More Room for Improvement

The price of gas is currently in a slight plunge nationally. This new data is encouraging, and it may help with tackling inflation since many parts of the U.S. economy are still reliant on fossil fuels. But that doesn’t mean we should celebrate. There’s still a lot more that needs to happen before we can reach price levels seen only a year ago.
Filling Up 7 photos
Filling UpMexico suspends gas subsidy as Americans cross border for dealsMexico suspends gas subsidy as Americans cross border for dealsVarious Fuels USThese hypermiling techniques will save you a lot of money on fuel, despite the sky-high pricesNational Average Gas Prices on the 15th of August 2022
Fresh data provided by AAA shows that a gallon of regular gas is selling for an average price of $3.95 in the U.S. – that’s $0.003 less than yesterday’s price. It’s a welcomed decline considering that only a month and a half ago Americans were pumping gas for an average cost of over $5 per gallon. Mid-grade and premium gas remain above the $4 threshold, whilst diesel is still selling for a national average price of over $5 a gallon.

But with the restart of the Gulf of Mexico pipelines in sight and China’s disappointing demand, things could get much better. Moreover, Aramco – the world’s largest exporter of oil and second-largest company by market capitalization – recently announced it’s ready to increase output to 12.3 million barrels per day by 2025, according to S&P Global. The current daily output is close to 10.5 million barrels.

The Saudi entity also reaffirmed that its operations are sustainable and it plans to deliver on its promise of making sure the carbon dioxide capturing plants it operates in multiple countries can sequestrate over 800,000 tons now and almost 11 million tons by 2035.

Because oil is part of a global market and the U.S. is the world’s largest consumer, traders are constantly trying to figure out what’s going to happen. They can up the price by anticipating issues or increased demand which, in turn, sends prices of gas or diesel to new highs. Fortunately, the global climate for oil looks calm and predictable now. That’s why most of those involved in making sure trading oil is still profitable aren’t ready to bet on the prices going up. Demand may be increasing for a while because people are vacationing, but that’s set to gradually stop.

Additionally, major players are looking into Africa as the next spot for a natural gas and oil boom. This could also lower the price of gas, diesel, and kerosene. But things are just starting to make sense. There's still a long road ahead.

At the time of writing, WTI Crude and Brent Crude are trading at $87.57 and $93.27, respectively. These values haven’t been seen since February.

For now, things look good for people and economies that still rely on oil and its products. We might even return to last year’s average price for regular gas of $3.18 per gallon in a couple of months if things won’t go south in some parts of the world. A real (but welcomed) surprise would be to see January 2021 prices once again – that’s when a gallon of regular gas was selling at an average cost of $2.39 nationally.

 
 
 
 
 

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