(Bloomberg) — US gasoline dropped below $4 a gallon for the first time since July, offering consumers some relief at the pump, although prices remain significantly elevated on a seasonal basis.
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The nationwide average retail price for regular gasoline slipped to $3.98 a gallon on Monday, according to the American Automobile Association, extending a decline that started in late September. It is the first time the average has fallen below the key psychological level since mid-July.
US pump prices surged after the US and Israel launched military strikes on Iran in late February, triggering an energy shock as exports of crude and refined products were disrupted through the crucial Strait of Hormuz. President Donald Trump last week said it was “largely true” that Republicans lost the midterm elections because of the war in the Middle East.
Other supply disruptions have added to the pressure. Escalating Ukrainian attacks on Russian refineries, along with lower exports from China, have contributed to a tighter global fuel market. US gasoline prices typically fall heading into winter as driving demand declines, but prices remain about 19% above the seasonal average.
There are some signs of relief. US gasoline stockpiles, which have been below seasonal levels since late April, have started to recover, while crude prices have tumbled on hopes for a faster resolution to the war. Gasoline futures have also slumped this month.
Still, pump prices typically fall more slowly than they rise, and any renewed conflict between the US and Iran could send gasoline soaring again. The retail price of diesel remains above $6 a gallon after crossing that threshold for the first time in September.
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