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Gasoline prices at the pump have turned negative year-on-year, after falling 18% since September.
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The average price of a gallon of gasoline in the U.S. fell to $3.20 this week, compared to $3.90 a few months ago.
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The sharp drop in gasoline prices comes at a seasonal low following the busy summer travel season.
Our chart of the day comes from Bespoke and shows a sharp decline in the average price per gallon of gasoline since September.
According to AAA, gasoline prices fell 18% this week to $3.20 a gallon, compared to a high of $3.90 a gallon in 2023 just a few months ago.
The sharp decline marks a new low for the average price per gallon of gasoline in 2023 and is below the 2022 close of about $3.21. The decline comes several months after the busy summer travel season, when demand for gasoline typically increases as more people go on vacation.
The drop in gasoline prices coincided with the drop in crude oil prices. The price fell from $95 a barrel in September to around $70 today, a drop of 26 percent. Oil prices are currently experiencing their longest decline in five years.
According to Bespoke, the sharp drop in gas prices is likely to put downward pressure on inflation.
“In our view, we are likely to see a negative month-on-month comparison in the November consumer price index, primarily due to the sharp decline in gas prices,” Bespoke said in a note to clients on Thursday.
If the CPI falls in November, as Bespoke expects, it could have a strong impact on the Federal Reserve’s interest rate decisions. The market expects the Fed to keep rates steady at its FOMC meeting next week, followed by a wave of rate cuts throughout 2024.
Read the original article on Business Insider
