Why are gas prices dropping? Don’t thank Biden

Oil, the main component of gasoline, fell below $90 a barrel on Thursday for the first time since February, when Russia invaded Ukraine and triggered a global energy crisis. Traders are nervously offloading more supplies as signs of recession persist.

To what extent have gasoline prices decreased?

The average price of gas in Houston fell to 3.73 cents a gallon this week after rising above $4 a gallon for the first time in history in the months following the Russian invasion of Ukraine. Prices here are down nearly 70 cents a gallon over the past month and 91 cents since prices peaked here at an average of $4.64 a gallon.

How do gas prices compare today to normal prices?

Houston residents are still paying nearly 97 cents more per gallon than they did last year, even as prices are steadily dropping. Nationally, gas prices averaged about $4 a gallon, compared to $3 a gallon last year, when vaccinations boosted summer travel, and $2.60 a gallon in July 2019.

The early pandemic brought the lowest gas prices in recent memory, dropping them to $2 a gallon nationally in July 2020, as the coronavirus intensified and the shutdown destroyed demand.

Why is the demand dropping now?

Part of the decline is seasonal. People drive more in the summer and the driving season peaks in early July and then tapers off in the fall. We can blame the rest on inflation.

Inflation reduces the purchasing power of consumers and forces them to reduce spending. It has become such a driving force that it is doing more to reduce gasoline demand than the pandemic did in the summer of 2020, according to Department of Energy data released Wednesday.

Gasoline demand is down 8 percent to 8.5 million barrels a day over the past week — 13 percent down from 9.8 million barrels a day during the same week last year, and nearly 1 percent less than the same week in 2020.