Gasoline Prices Continue to Fall, Experts Say Return to $3 Per Gallon Unlikely in Short Term

(CNA Washington, June 18 - Compiled by Foreign News Service) The average price of regular gasoline at U.S. gas stations has now fallen below $4 per gallon, the first time since March 30. However, experts believe that even if oil prices continue to decline, it is unlikely to return to the pre-war level of $3 per gallon in the short term.

According to data from the American Automobile Association (AAA), the national average price of regular gasoline fell to $3.999 per gallon today, down nearly 3 cents from the previous day. Indiana had the lowest average price at $3.40 per gallon.

The United States and Iran have signed a Memorandum of Understanding (MOU) to end the war and reopen the Strait of Hormuz.

The national average oil price has been falling since reaching a high of $4.56 per gallon on May 21. However, experts believe that even if oil prices continue to decline, it is unlikely to return to the pre-war level of $3 per gallon in the short term.

Matt Smith, chief analyst at shipping tracking firm Kpler, told CNN that it may take 3 to 4 months for tankers to resume normal passage, and it will take even longer to replenish the supply lost during the war.

Experts point out that it will take time not only for tankers stranded in the Persian Gulf to resume operations, but also for many oil production and refining facilities in the Middle East, which were almost shut down during the war and some were damaged by fighting, to be reactivated.

As crude oil is a global market, even though the proportion of oil transported from the Middle East to the United States is relatively low, changes in its supply still affect the prices paid by U.S. consumers and businesses. Long-term oil price trends also indicate that oil prices are unlikely to return to below $70 per barrel in the coming years.

The International Energy Agency (IEA) stated yesterday that due to governments drawing down inventories to cope with the disruption of Persian Gulf crude oil transport during the Middle East war, oil inventories in member countries of the Organization for Economic Co-operation and Development (OECD) fell to their lowest level since 1990 in May.

Some experts believe that with the summer driving season approaching, U.S. gasoline prices may rise above $4 per gallon again later this year, with the possibility of returning to below $3 per gallon being extremely slim.

Dan Pickering, chief investment officer at energy industry financial services firm Pickering Energy Partners, said, "The market will eventually find a new normal, but $2.85 per gallon gasoline is not going to be that new normal." (Compiled by: Liu Wenyu) 06/18/2024

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