Drivers in Southern California are feeling more relieved to pump gas, with the average cost of a gallon of regular gas in Los Angeles County dropping below $5.50.
Gasoline prices have fallen from recent record highs across the country as oil prices and gasoline demand fell and gasoline supplies increased, analysts said. But oil and gas prices are volatile creatures, and market watchers are in turmoil over when gas prices could drop below $5 a gallon in the state.
A gallon of regular gasoline costs $5.48 on Monday on average, down nearly a dollar since peaking on June 14 at $6.46, according to American Automobile Assn, according to American Automobile Assn. . That is the lowest price since March 7.
LA County’s median price puts it in 10th place out of 31 California markets tracked by AAA. The San Luis Obispo area is the most expensive at $5.80 a gallon; El Centro is cheapest at $5.15 a gallon.
California’s prices remain the highest in the country, with a statewide average of $5.45, well above the national average of $4.06, AAA data shows.
GasBuddy.com oil and gas analyst Patrick De Haan predicts that the cost-per-gallon gas is likely to fall below $5 in LA County and statewide, in anticipation of unforeseen disruptions or disruptions. significant changes in supply and demand.
The main drivers of the drop in gas prices, De Haan said, include a slowing economy, which could limit oil consumption, and a drop in crude prices as traders anticipate a possible return of Iranian oil on global markets as the US and Iran move closer to talks on reviving the 2015 Iran nuclear deal.
“There have been a lot of outbreaks and geopolitical tensions that could have hit the market at some point,” De Haan said.
“We have pretty good odds right now that LA will go below the $5 mark, but it will take time,” De Haan said.
Gas under $5 can be found in LA, with two of the lowest prices on East 3rd Street at Berri Brothers ($4.59) and Arco ($4.65) in East Los Angeles, according to GasBuddy.
Doug Shupe, AAA’s communications director, is more uncertain about whether and when Californians might see $5 gas become widely available.
“We didn’t know what we were going to see in Southern California here,” Shupe said. “We expect to see more relief at the pump for motorists…. We just don’t know how long that trend will continue.”
Shupe said one factor affecting the pump will be holiday travel as people prepare for the Labor Day holiday in early September.
“People are still prioritizing their budgets to take family trips this summer,” says Shupe. “And that’s what we saw on both Memorial Day and 4th of July. And that’s what we expect to see during the Labor Day holiday as well. “
AAA recently released a survey that found that 64% of adults in the US have changed their driving habits since March due to soaring gas prices. The top three changes are reducing commuting, combining errands, and reducing shopping or eating out.
However, De Haan said he believes drivers are not changing their habits significantly enough to affect gas prices.
Gas consumption is only 5% to 8% lower than usual this time of year, said De Haan, and while that has increased supply a bit, it’s not near the level expected, De Haan said. Haan said.
“We see a drop in prices that have nothing to do with a very small drop in demand,” he said.
The price of crude oil is the most important component of the cost of gasoline, accounting for 60% of the price per gallon, US Energy Information Administration estimates. And this component continues to remain high.
While millions of people are paying dearly for pumps, oil and natural gas companies are turning a profit. Last month, the five largest oil and natural gas companies reported total second-quarter profits of $55 billion.
Mr. De Haan said the ongoing conflict between Russia and Ukraine, along with the pandemic, remained a factor driving prices up.
“Now, with the economy going up again, there is little ability to keep up with the recovery,” including oil production, De Haan said. “So we will not return to normal until we fully normalize in a post-COVID world and until the war in Ukraine is over.”
Since the crisis in Ukraine began on February 25, the price of a barrel of crude oil has been steadily hovering above $90, reaching as high as $120. On Thursday, price drops below $90 mark for the first time since February.
https://www.latimes.com/business/story/2022-08-08/los-angeles-gas-prices-falling-how-long-can-it-last Los Angeles gas prices are falling. How long can it last?