The U.S. national average price of regular gasoline fell to $3.9788 a gallon on Nov. 10, slipping below $4 for the first time since July, AAA data showed.
The average was down about 17 cents from a week earlier and nearly 39 cents from a month earlier, according to the motorist group’s figures. The move offers some relief at the pump after a period of elevated energy costs.
The decline followed a significant slowdown in energy inflation in October. The Bureau of Labor Statistics reported that energy prices rose 0.7% for the month, compared with a 5.2% increase in September. The agency’s gasoline index rose 1% in October after advancing 9.1% in September.
Seasonal pressure and lower crude
Bespoke Investment Group noted that gasoline prices usually fall at this time of year, so seasonality accounted for part of the relief alongside lower crude prices. The firm said a failure of pump prices to decline in these conditions would have been unusual.
The pump-price decline followed a sharp retreat in crude oil. Brent crude, the international benchmark, briefly fell below $90 a barrel on Tuesday for the first time since August as comments from U.S. President Donald Trump fueled hopes for an end to Washington’s nearly nine-month conflict with Iran.
Recovering oil flows from the Persian Gulf have also eased supply concerns. Regional crude exports, including pipeline shipments, have returned to an estimated 80% to 85% of prewar levels, ING said.
ING analysts said energy markets remained under pressure as hopes for a de-escalation in the Middle East reduced geopolitical risk premiums. Oil extended its losses as Gulf supply flows continued to recover, while European gas also moved lower, the analysts said.
Waller flags persistence risk
Federal Reserve Governor Christopher Waller warned Tuesday that energy shocks may have more persistent effects on inflation than they did before the pandemic. He said he was pleased to see energy prices down from their highs over the past week or so, but they remained “quite elevated relative to the start of the year.” The ultimate effect on inflation will depend on what levels are sustained, he said.