The national average is now $3.61. Experts predict further decline in the next few weeks. The downside? Lower oil and gas prices are symptoms of weakening economic conditions in the U.S. and around the globe.
On Friday, oil plunged nearly 4 percent as a bleak report on U.S. job growth heightened worries about a slowing global economy and waning oil demand. Sobering economic news from China and Europe also contributed to the drop.
U.S. drivers should feel some relief, even if they’re worried about jobs. Auto club AAA says pump prices fell nearly 5 percent in May, the largest monthly percentage drop since November. Some station owners in South Carolina on Friday even presented drivers with a gift at the start of summer driving season: $2.99 gas.
It’s still questionable how much lower gas prices will boost consumer confidence.
Phil Flynn, an analyst for The Price Futures Group, believes falling gas prices could give consumers a psychological boost. But that could evaporate if hiring doesn’t pick up and stock markets keep swooning.
“If you don’t have a job, it doesn’t matter if gasoline prices are $5 or $2 a gallon,” he said.
Those who can afford a new car payment will appreciate falling gas prices. Automakers reported selling 1.3 million cars and trucks in May. Auto sales remain a bright spot in the U.S. economy. Still, those sales won’t reverse a decline in gas demand in the U.S. because the new models are more fuel efficient than older ones heading to the scrap heap.
Energy futures fell across the board, as did global stock markets. Heating oil fell 7.53 cents to $2.628 per gallon, gasoline futures fell 6.59 cents to $2.657 per gallon and natural gas dropped 9.6 cents to $2.326 per 1,000 cubic feet. U.S. stock markets dropped more than 2 percent and are now lower for the year.