The latest data from the U.S. Energy Information Administration showed that the average cost for Regular gasoline in America fell by six cents during the past week to $2.75 per gallon. That was the 4th decline in a row, the lowest price since April, and the largest 1-week drop in more than a year. Regionally, the cheapest gas in the country can be found in Oklahoma, where a gallon of Regular costs just $2.40 on average, while residents of California as usual have to pay the most in the continental U.S. for Regular ($3.73/gallon).
Overall, the price Americans pay at the pump is down 7.06 percent since May, not surprising with oil (WTI) falling roughly 20 percent from its year-to-date high in just the past few weeks. There are several factors behind the recent selloff in the energy space, and hedge fund managers have started to establish short positions betting on further price declines. A short squeeze is of course a growing risk, but if prices remain low it could not only help consumers (and businesses) this holiday shopping season but also provide the Fed with some inflation-related cover for a slower pace of interest rate hikes.
Sources: U.S. EIA, GasBuddy, Reuters
Post author: Charles Couch