Why Are Gas Prices Falling, and Will This Trend Continue?

Average U.S. gas prices fell to $4.605 on Thursday, continuing a decline from a record peak of $5.107 in June. Why is this happening, and will this trend continue?

Gas prices were still substantially higher than a year prior, when they hit $3.147. Even that was significantly higher than in April 2020, when low demand and an oil price war between Russia and Saudi Arabia drove gas prices down to $1.87. 

Analysts initially pointed to recession fears when oil prices started falling in July; less economic activity was predicted to come with less demand for gasoline. An analysis from Reuters (Center bias) said investors were worried the Federal Reserve’s interest rate hikes would slow the economy in a bid to control inflation. In a Wednesday tweet, President Joe Biden said falling gas prices offered “breathing room” for families but argued gas companies were not passing all of the gains from falling crude oil prices onto consumers. 

Coverage was more common from the left and center; coverage from the right often criticized Biden's remarks. Some coverage from the right and center framed falling prices as risky for “mom-and-pop” gas station owners, and some coverage from the left criticized this coverage as a hypocritical “pivot” from “complaining” about high prices.