Gasoline drops below $4 for first time since July

The national average price for regular gasoline fell below four dollars per gallon on Tuesday, marking the first time the cost has dipped under that threshold since July 20, according to AAA data.

The current average stands at $3.98 per gallon. This represents a decline from $4.01 on Monday, November 9, and a drop from $4.15 recorded one week ago. The price was $4.37 one month prior and $3.07 exactly one year ago.

The immediate relief at the pump follows a sharp decline in crude oil markets. Oil futures dropped 13 percent last week, which was the largest percentage fall for Brent crude since April 2020. Prices fell another 5 percent on Monday, reaching their lowest level since August 31. On Tuesday, prices briefly dipped below $90 per barrel.

The downturn in oil prices began after President Donald Trump told NBC News he did not plan to attack Iran. The decline accelerated after Democratic candidates secured strong results in the Tuesday midterm elections, a performance some observers described as a blue tsunami.

Market traders began betting that Democratic control of the House of Representatives and the Senate would limit certain economic policies of the Trump administration, including the war against Iran. ING commodity strategists noted in a report that Democratic control of Congress likely means greater scrutiny of the war and more difficult financing. They added that the election results imply increased resistance within the Republican Party.

President Trump reiterated his stance against a major escalation on Monday. He told journalists at the White House that the military war against Iran is practically finished. He stated that the administration is simply maintaining the status quo. He cited a positive impulse in ongoing conversations and said he sees a good possibility that the war could end. Trump added that military action does not seem very necessary, but that the U.S. is prepared and ready to act if conditions change.

Despite the recent drop, gasoline prices remain elevated. They are more than 30 percent higher than before the war with Iran began on February 28. Prices are also roughly 40 percent higher than at the start of the year.

Diesel prices have also fallen in recent days. The cost dropped from $6.28 per gallon on Election Day to $6.15. Economists say diesel prices affect supermarket and department store inflation quickly because the fuel is essential for transporting goods via train, ship, and truck. Diesel prices have risen more steeply than gasoline, remaining over 70 percent higher than at the beginning of the year. This increase is attributed to the war with Iran and continued attacks on energy infrastructure in the Russia-Ukraine conflict.

The price drop is expected to continue in the coming days due to new market expectations and falling oil prices. The current average of $3.97 is down from $4.14 on the day of the elections.