Gasoline prices have already seen their summer peak and will likely head lower going into the fall, says one oil analyst.
On Wednesday, the national average price of a gallon of gas sat at $3.46 per gallon, down five pennies from a month ago and $0.37 lower than a year ago, according to AAA data.
"With gasoline inventories adequate to meet demand through Labor Day, I expect retail prices to remain steady at around $3.50 per gallon over the next few weeks and then decline as we get into October," Andy Lipow of Lipow Oil Associates told Yahoo Finance on Wednesday.
The latest government data showed gasoline demand fell last week while refining activity rose and fuel inventories increased.
Lipow said the main caveat that could send prices at the pump higher at this point would be an oil supply disruption stemming from ongoing conflict in the Middle East.
"Unless that happens, gasoline prices have seen their summer peak," said Lipow.
Even in California, where gasoline is the most expensive in the country, prices are down roughly $0.16 from a week ago and $0.78 from last year, when a Tropical storm hammered the state and caused supply disruptions.
Meanwhile oil prices have come down about 10% since the beginning of July, even with a rise of more than 2% on Wednesday amid an overall market rebound and reports Israel has braced for a retaliatory attack from Iran following the recent assassination of a Hamas leader in Tehran.
Iran accounts for just over 3% of global crude production, with roughly 3 million barrels of crude output per day.
West Texas Intermediate ( CL=F ) prices on Wednesday were hovering above $75 per barrel while Brent, ( BZ=F ) the international benchmark price, also rose to trade just above $78 per barrel. WTI reached its year-to-date low on Monday, falling below $73 a barrel.
Brent prices are likely to rise "back to $80 per barrel by the end of the year," analysts at London-based Capital Economics wrote in a note on Tuesday.
“For now, our central case is that the US economy avoids a hard landing and that oil demand in the US and in China does not begin to fall sharply,” the firm added.
OPEC+ recently reiterated its plan to unwind some of its voluntary production cuts in October, but Saudi Arabia left the door open to pause or reverse output hikes if the market won't support it.
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