Gasoline prices in the U.S. fell by the biggest single-day decline in 13 years on Thursday, the result of lower demand at the pump and a drop in oil prices, but analysts say gas prices could rise again if demand picks up and supplies are constrained.
AAA said the average U.S. pump prices fell by about three cents to $4.721/gal overnight, marking the 24th consecutive day of decline and the largest daily drop since December 2008; prices are ~6% lower than the $5.02/gal nationwide peak on June 14.
Despite the recent drop, gasoline prices remain ~$1.60 higher than a year-ago, and 10 states remain stuck with prices above $5/gal, with California above $6/gal.
U.S. gasoline futures (XB1:COM) are offering some hope for continued improvement, as front-month Nymex RBOB gasoline fell 6.5% for the week to $3.447/gal.
The national average could drop to $4.00-$4.25 by mid-August, barring a spike in oil prices, GasBuddy’s Patrick De Haan said.
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Some Wall Street firms see oil prices regaining prior highs, which would mean only temporary relief at the pump; Goldman Sachs forecasts Brent crude will hit $140/bbl this summer, while bearish CIti analysts have said Brent could sink to $65 by year-end if the economy tips into recession.