U.S. gas prices have dropped to their lowest Independence Day level in four years, with the national average now at $3.14 per gallon, according to GasBuddy. The dip is driven by a retreat in Middle East tensions and consistent supply from both U.S. shale producers and OPEC+ exporters.
Brent crude futures have fallen steadily over the past two weeks, dropping from over $75 per barrel to just under $68 as of Monday. The de-escalation between Israel and Iran has eased fears of shipping disruptions through the Strait of Hormuz, through which about 20% of global oil trade flows. Risk premiums in oil futures have largely evaporated.
Patrick De Haan, head of petroleum analysis at GasBuddy, said prices are declining rapidly after earlier surges driven by geopolitical concerns. Refinery utilization in the U.S. remains high, with fuel inventories stable or growing in most major markets.
“For motorists planning to hit the road for Independence Day, gas prices are expected to continue falling nearly coast to coast in the lead-up to July 4. Relief could expand as the holiday weekend approaches, with the national average on track to hit its lowest July 4 level since 2021 at $3.15 per gallon, we project,” GasBuddy stated.
“As long as tensions in the Middle East remain contained and the U.S. avoids a major hurricane, we could see the national average fall below $3 per gallon later this summer.”
Regional price trends reflect the national drop. South Carolina’s average fell to $2.83 per gallon, a 2.8-cent weekly decrease and 34 cents below the same period last year. In Iowa, prices dropped 7.7 cents in a week to $2.97 per gallon, while drivers in Columbus, Ohio are paying $3.04, down 14.3 cents since last Monday.
AAA is projecting a record number of Americans will travel by car over the holiday, but increased demand has not yet reversed downward pressure on fuel prices. GasBuddy analysts point to strong domestic production, robust refining output, and moderating gasoline demand as contributing factors.
By Charles Kennedy for Oilprice.com
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