by Matthew Rusling
WASHINGTON, July 8 (Xinhua) -- U.S. gasoline prices have slid from all-time highs and could come down even lower, giving millions of Americans some much-needed financial relief, according to experts.
"There's been a significant decline in both crude oil futures and gasolines futures prices, and I expect that the national retail average price of gasoline is going to hit 4 dollars and 50 cents a gallon over the next couple of weeks," Andrew Lipow, president of Lipow Oil Associates, a consulting firm, told Xinhua.
Friday's national gas price average stood at 4.721 U.S. dollars per gallon, down from an all-time high of 5 dollars per gallon in recent weeks, according to the American Automobile Association.
"It's a combination of seeing demand destruction from the higher prices. Consumers change not only their local driving habits, but they take shorter driving vacations this summer," Lipow said.
That is happening in conjunction with fears of a recession that are being caused by high prices not only for energy but for food and all sorts of consumer goods, Lipow said.
"Since the price of just about everything is higher in recent months, the one place consumers can cut back is on their summer vacation travel," Lipow said.
Gasoline futures dropped over 10 percent earlier this week and have fallen over 20 percent since June, and that has sparked hope that Americans might soon feel relief.
The price of gasoline has spiked by 50 percent from this time last year, when it was 3.137 dollars per gallon.
Patrick De Haan, head of petroleum analysis at GasBuddy, said national gas prices could drop 25 to 50 cents per gallon in the next several weeks.
"It's going to translate into an extension of the decline we've already seen" over the past three weeks, De Haan said, as quoted by USA Today.
"Another week of the decline is coming, and potentially even more declines beyond that."
Since oil is a major ingredient in gasoline, the global oil price surge has had a major impact on prices at U.S. gas stations.
WTI Crude, the U.S. benchmark, slid 8 percent Tuesday to under 100 U.S. dollars per barrel. While the price ticked up a few dollars on Thursday and Friday, that's still far below the March 8 high of over 123 U.S. dollars per barrel.
Marianne Kah, a research scholar with the Columbia University's Center on Global Energy Policy, said the slide in crude oil prices will cause gasoline prices to drop around 12 percent.
"We're talking about 60 cents a gallon," said Kah, as quoted by The Hill, a U.S. political newspaper.
"Now, of course it takes time to have the crude price flow through to the gasoline price," said Kah, who is also the former chief economist at ConocoPhillips, a major oil company.
At the same time, major U.S. banks have published various forecasts on oil prices, and some differ sharply.
Citibank said oil prices could plummet to 65 dollars a barrel this year and 45 dollars a barrel in 2023 if a recession occurs.
By sharp contrast, JPMorgan forecast a massive price hike of 380 U.S. dollars a barrel in a worst-case scenario if Russia, a major global oil producer, cuts output.
Experts agree that recent price reductions have been sparked by worries over a possible recession.
However, there remains no consensus on whether a recession will occur, with some economists predicting a downturn while others believe the United States could steer clear of economic disaster.
A model by Bloomberg Economics tags the probability of recession in the next 12 months at 38 percent - a sharp rise from zero just months ago.
The main reason for such fears is the most rapidly advancing inflation in 40 years, caused by factors including the massive U.S. government COVID-19 stimulus - which many economists believe was far too big -- and the conflict in Ukraine.
The U.S. Federal Reserve is scrambling to catch up, and is hitting the brakes hard. On its June policy meeting, the Fed hiked the benchmark cost of borrowing by the most in 28 years. ■