Retail gas prices dropped to $4.12 a gallon on Monday, as U.S. oil prices fell below $100 a barrel
U.S. drivers could soon get more relief at the gas pump if recent oil-price declines hold.
U.S. drivers could see more relief from high gas prices in the days to come, after prices at the pump fell last week by the most since June and as Monday saw a drop of more than 7% in the cost of a barrel of oil.
"If oil keeps plummeting, gas and diesel prices will follow," said Patrick De Haan, head of petroleum analysis at GasBuddy, adding that any drop in fuel prices may lag the decline in oil by two to four days.
On Monday, the average price for regular unleaded gasoline was $4.12 a gallon, according to GasBuddy.
Prices dropped 17.1 cents over the last week, for the biggest weekly decline since the week that ended June 21, according to data from GasBuddy. Prices, however, are still about 38%, or $1.13, higher than a year ago.
Average retail diesel prices, meanwhile, were at $6.28 a gallon on Sunday, down roughly 6 cents from a week ago still but up more than 70% from a year ago, when they stood at $3.67, GasBuddy data show.
Both gasoline and diesel prices sit at "structurally high" levels that will not revert to more typical levels until the Iran conflict ends and global inventories and production recover, said Alex Jacquez, senior vice president of policy, advocacy and research at Groundwork Collaborative, an economic think tank.
Despite U.S. oil prices moving below $100 a barrel on Monday, Jacquez said he still views prices around $100 per barrel as the "new normal" - and that has had an impact on consumers. "Without a clear end to the war, these high prices are here to stay, through the holiday season and beyond," he said.
Jacquez served as special assistant to the president for economic development and industrial strategy from late 2022 to early 2025, during the Biden administration.
Still, there's a possibility that gasoline prices could see further declines this week as long as the U.S. and Iran are both "preaching restraint and working toward a solution," De Haan told MarketWatch. If either side breaks or threatens new escalations, prices may move higher, he said.
On Monday, U.S. benchmark West Texas Intermediate crude (CL.1) traded at $96.60 a barrel, down 7.2% and poised for the largest one-day percentage decline since July, according to Dow Jones Market Data. A settlement around this level would be the lowest since Oct. 14.
Oil prices saw a steep decline Monday on hopes that a deal to end the U.S.-Iran war could be reached soon after the midterm elections, said Pavel Molchanov, an investment-strategy analyst at Raymond James. Iran is reportedly claiming that it is willing to reopen the Strait of Hormuz within two days once a deal is reached.
Skepticism is warranted, however, Molchanov noted. "There have been many 'false dawns' over the past eight months," he said.
If there is a deal that's "concrete and both sides echo it," and if there's a tone between the two nations that triggers confidence that a deal has been reached, declines in gasoline prices would likely start "very quickly," said GasBuddy's De Haan.
The day before the U.S. and Israel attacked Iran on Feb. 28, the average price of gas was $2.98 a gallon, according to GasBuddy.
-Myra P. Saefong
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