Gasoline prices remain high before the midterms
Retailers and fuel users remain exposed because supply shortages and slow retail price cuts can outlast oil-price relief.
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The national average for a gallon of gasoline stood at $4.06 Friday, up from $2.98 two days before the conflict began. independent.co.uk · 7 Nov
Who it hits Households buying gasoline and highway diesel users remain exposed to elevated fuel costs on the quoted gasoline and diesel readings. ARCANE inference
AAA’s average stays at or above the cited benchmark while reports still point to supply shortages or delayed retail price cuts.
AAA’s average falls below the cited benchmark without reports of supply shortages or delayed retail price cuts.
Gasoline prices now turn on retail inventories as much as on any peace-driven drop in oil costs. The national average for a gallon stood at $4.06 Friday, up from $2.98 two days before the conflict began, according to AAA.
That puts the election-season burden on households that buy gasoline and on fuel users already facing record diesel costs. Highway diesel has continued setting daily records since Labor Day and surpassed the previous record of $5.82 per gallon set in 2022, according to the Energy Information Administration.
The near-term call is blunt. De Haan said in a post on X that gasoline would not fall below $4/gal prior to the midterms, and Cinquegrana answered “Short answer: No” when asked whether prices could fall below that benchmark by Election Day.
The starting point was already high. The national average price of a gallon of gas stood at $4.27 on Oct. 22, up nearly $1.30, or 43%, since the outbreak of the Iran war in February, AAA data showed.
For now, however, a supply shortage will likely keep gas prices above $4 a gallon over the next couple weeks, ABC News reported on Oct. 22; analysts also attributed elevated prices to ongoing fighting in the Middle East, damaged oil infrastructure and costly crude transport.
Retail timing can slow the decline even if crude eases. In a peace deal and a drop in oil costs, gas prices would likely fall at a delayed pace while retailers sell through refined product bought when oil prices were higher, analysts added.
Ramanan Krishnamoorti, a professor of petroleum engineering at the University of Houston, told ABC News that gas prices usually fall more slowly than they rise because retailers prefer to keep prices elevated while selling inventory acquired at high cost.
The case for relief has evidence. Some analysts acknowledged reason to be hopeful about the general outlook for costs at the pump, and the national average had moved down from the Oct. 22 level by Friday.
Rob Smith, an analyst with S&P Global Energy, told Axios that even with a true and lasting end to the military conflict, it would still be several months before traffic through the Strait of Hormuz returns to its pre-war level.
If AAA’s average breaks lower quickly, the inventory-delay story weakens. If it does not, cheaper crude will matter less for pump prices than retailers still selling fuel bought at higher oil costs.