May 8 (UPI) — A steady decline in the price of crude oil continues to make its way to the consumer level, with this week marking the third in a row for a decline in retail-level gasoline prices, data show.
Gasoline prices have declined steadily since early April due to lingering fears of a recession. Consumer-level inflation continues to run above the 2% target rate set by the Federal Reserve, prompting it to again raise the Federal Funds rates Wednesday to a target range of 5% to 5.25%.
Federal Reserve Chairman Jerome Powell suggested the economy may be facing headwinds deeper into the second quarter, contributing to recent weakness in the price of crude oil.
With the price of oil accounting for the bulk of what consumers see at the pump, trends are moving lower.
“While there have been a few pockets of rising prices, those have been the needle in the haystack, with nearly every single state seeing gas prices fall,” said Patrick De Haan, the lead petroleum analyst at Chicago-based GasBuddy.
For Monday, travel club AAA listed a national average retail price of $3.54 for a gallon of regular unleaded, down 8 cents from this time last week and 6 cents lower than month-ago levels. The average price at this time last year was $4.32 per gallon.
Crude oil prices were recovering on Monday after posting heavy losses the prior week. At around $73 per barrel for West Texas Intermediate, the U.S. benchmark for the price of oil, the contract is about $6 per barrel lower than it was this time last month. Retail-level gasoline prices may increase over the coming weeks, however.
“With fears of another banking crisis softening and strong earnings from some U.S. companies, financial markets have seen a strong rally start to take hold,” DeHaan added.
It’s unlikely, however, that retail prices will hit $5 per gallon as they did last year. Federal forecasts for the full-year average remain below $4 per gallon.
