Due to Falling Oil Prices, US Gasoline Prices Also Drop... Largest Decline This Year

As international oil prices continue to decline, gasoline prices in the United States, entering the summer 'driving season,' are experiencing the largest drop this year. International oil prices have been falling for five consecutive trading days due to expectations of production cut reductions by oil-producing countries.

[Image source=AFP Yonhap News]

According to the American Automobile Association (AAA), on the 4th (local time), the national average gasoline price in the U.S. was $3.518 per gallon, down 6.8 cents from the previous week. This is the largest weekly drop so far this year. Compared to a month ago, it has fallen by 14.1 cents.

The significant decline in U.S. gasoline prices during the peak summer driving season is a result of the recent downward trend in oil prices. Typically, crude oil accounts for about 55% of the cost of one gallon of gasoline. Tom Kloza, Global Energy Analyst at OPIS, said, "When wholesale prices fall, retail gasoline prices also fall." Denton Cinquegrana, Senior Analyst at Oil Price Information Service, predicted, "Prices could drop by 10 to 15 cents per gallon within the next six weeks." However, hurricanes in July and August are considered potential variables.

On this day, oil prices fell for the fifth consecutive trading day due to expectations of production cut reductions by OPEC+, a group of major oil-producing countries, and concerns over economic slowdown caused by a contraction in U.S. manufacturing. At the New York Mercantile Exchange, West Texas Intermediate (WTI) crude oil for July delivery closed at $73.25 per barrel, down $0.97 (1.31%) from the previous day. This is the lowest closing price since February 5.

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