Texans, you can breathe the next time you fill up at the gas station. At least now.
Statewide gas prices fell 16 cents last week, the biggest weekly drop in Texas this year. A good chance to give drivers a break will continue in the coming weeks after the average price of gas rose to $4.70 a gallon across the state on June 15.
The average price in Texas is now $4.33, according to AAA, and some gas stations in Dallas-Fort Worth, such as Costco, Sam’s Club, Murphy USA and Walmart, are already below $4 per gallon. Outside the region, Laredo in South Texas already averages less than $4, and other parts of the state are close.
Despite the appeal of cheap gas, the decline does not mean inflation is under control. Part of the reason for the decline is an increase in regional supplies of gas and fears of an economic recession will lower crude oil prices.
The last six days were what OPIS global head of energy analysis Tom Kloza called “recession sessions.” AAA Texas spokesman Daniel Armbruster and GasBuddy oil analyst Patrick de Haan agree with Kloza.
Armbruster said the likelihood that Texas will see a $5 per gallon average is diminishing, but there’s no guarantee that prices won’t bounce back “at least in the short term.”
“But we can’t guarantee that prices won’t bounce back, at least in the short term.”
No analyst is willing to say this decline means gas prices will stabilize at lower prices. The Russia-Ukraine war, historic travel trends in July, and hurricane season make it difficult to predict.
“It’s more of an interval than a real trend change,” Kloza said, adding that he expects the slide to last until mid-July.
De Haan expects another week or two of declines, but all three analysts describe volatility over the Russia-Ukraine war as a wildcard that could send prices soaring again. On top of that, peak hurricane season in the Gulf of Mexico is approaching. Hurricanes and hurricanes could force refineries in the Houston area to close, resulting in a supply squeeze that pushes prices back up.
For now, gas supply is back on track to keep pace with demand. Armbruster credits the White House’s move to tap into the Strategic Petroleum Reserve, and Kloza pointed out that the profit margins in the oil industry are even bigger with falling prices. He expects West Texas to increase its oil production because of that.
“The big question is whether supply will keep up with demand,” Armbruster said. “Right now, it’s starting to happen and that’s one of the reasons we’re seeing prices fall.”
Demand surged ahead of the July 4 weekend, with domestic output jumping to 9.4 million barrels a day from 8.9 million, according to a Thursday report from the Energy Information Administration, which includes data through July 1. A very popular month for road trips.
The only concrete answer for consumers is that future gas prices may be heavily influenced by geopolitical factors and weather.
“When it comes to oil, nothing is a permanent trend,” De Haan said.
So save some money while you can.