Inflation in the US, the highest in 40 years 2:15
London (CNN Business) --
Drivers in the United States can breathe a small sigh of relief: Average gas prices have fallen below $4 a gallon for the first time since March.
The national average price of regular gasoline fell to $3.99 a gallon on Thursday, according to the American Automobile Association (AAA).
ANALYSIS |
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Gasoline prices hit a record $5.02 in June as drivers filled their tanks for the summer travel season.
They were also pushed higher by rising global oil prices as the West turned its back on Russian crude following Moscow's invasion of Ukraine.
But prices at gas stations have fallen 21% since then, as drivers cut back on spending and recession fears threaten to dampen demand.
Despite the drop, they are still 25% higher than in the same period last year.
"Despite the steady drop in gas prices during the peak of the summer driving season, fewer drivers refueled last week," AAA said in a Monday news release.
"It's another sign that, for now, Americans are changing their driving habits to cope with higher prices at the gas station."
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US crude oil prices have also fallen sharply from a high of over $120 a barrel in June to around $92 a barrel on Thursday, helped by an easing of global supply shortages.
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In a report released Thursday, the International Energy Agency revised its outlook for global oil supply upward, in part because Russia has continued to pump more oil than expected.
"While Russian exports of crude oil and petroleum products to Europe, the US, Japan and Korea have fallen by almost 2.2 [million barrels per day] since the start of the war, the diversion of flows to India, China, Turkey and others, coupled with seasonally higher Russian domestic demand, have mitigated losses," the Paris-based agency said.
By July, Russia's oil production was only 310,000 barrels a day below pre-war levels, while total oil exports were down by just 580,000 barrels a day, it added.
The release of 180 million barrels of oil from the US Strategic Petroleum Reserve has also helped increase supply.
— Matt Egan contributed reporting.
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