It is being reported that gas prices are easing downward. There are several variables contributing to the decreased prices. An economic slowdown in China due to continued Covid restrictions, the Federal Reserve raising the interest rates, and increased oil inventories, have all helped to lower fuel prices.
This past weekend, US drivers got a very slight break on prices as the AAA average for a gallon of unleaded gas fell just below the $5 mark after hitting a high of $5.02 a gallon last week. This price has declined by a fraction of a penny each day since then.
Currently, Washington has the fourth highest gas prices in the nation. Washingtonians could begin to see relief at the gas pump in the coming days and weeks. And not a day too soon for many commuters. Experts are saying that prices are slowly starting to inch down.
It is not a big sum. The average price statewide for a gallon of gas has been $5.51. experts are saying they are expecting a slow, but noticeable drop in gas prices. Relief may show through the July 4th holiday. But, these are still educated predictions.
To further educate readers, some are breaking down how prices work. The answer is basic economics- increase supply or reduce demand. Increasing supply is costly. Reducing demand happens when consumers start pulling back because prices have risen too much and individual budgets are strained.
With inflation and threats of a looming recession, it looks like consumers are pulling back. This happened this spring as gas prices soared above $5 a gallon and overall inflation top four-decade highs. In addition, prices of oil spiked to $122.11 on June 8, their highest since March and about a dollar off its highest level since 2008.
Then there seemed to be a ceiling reached. In just two weeks, oil prices have fallen 16%. Why? It’s inflation, yet again, and the Federal Reserve’s campaign to fight it. When central banks raise interest rates, it slows down economic activity, reducing demand for energy, which brings gas prices down.
