Gasoline prices have already peaked for the summer and are likely to fall further as we head into the fall, according to one oil analyst.
The national average price for a gallon of gasoline on Wednesday was $3.46 a gallon, 5 cents lower than a month ago and $0.37 lower than a year ago, according to AAA data.
“Gasoline inventories are sufficient to meet demand through Labor Day and we expect retail prices to stabilize around $3.50 a gallon over the next few weeks before declining as we move into October,” Andy Lipow of Lipow Oil Associates told Yahoo Finance on Wednesday.
Gasoline demand fell last week while refining activity picked up and fuel inventories rose, the latest government data showed.
Lipow said the main factor that could lead to higher gasoline prices at this point would be disruptions to crude oil supplies due to the ongoing conflict in the Middle East.
“Unless that happens, gasoline prices will have reached their summer peak,” Lipow said.
Even in California, where gasoline prices are the highest in the nation, prices are about $0.16 lower than a week ago and $0.78 lower than last year, when tropical storms battered the state and disrupted supplies.
Meanwhile, oil prices have fallen about 10% since the start of July, though they rose more than 2% on Wednesday following a broader market rebound and reports that Israel is preparing for retaliatory attacks from Iran following the recent assassination of a Hamas leader in Tehran.
Iran accounts for just over 3% of global oil production, pumping about 3 million barrels of crude oil per day.
WTI crude oil prices (CL=F) stayed above $75 a barrel on Wednesday, while the international benchmark Brent crude (BZ=F) was trading just above $78 a barrel. WTI hit its lowest level of the year on Monday, falling below $73 a barrel.
Analysts at London-based Capital Economics wrote in a note on Tuesday that Brent crude prices are likely to “return to $80 a barrel by the end of the year.”
“At this point, our central expectation is that the US economy avoids a hard landing and that US and Chinese oil demand does not fall sharply,” it added.
OPEC+ recently reiterated plans to unwind some of its voluntary production cuts in October, but Saudi Arabia left open the possibility of pausing or reversing production increases if markets do not support them.
Inés Ferré is a senior business reporter at Yahoo Finance. Follow her on X. Follow.
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