Gas prices in the United States have fallen below $4.90 a gallon as fears of an upcoming recession continue to mount.
As of Monday, the national average for a gallon of gasoline is $4.897, according to AAA.
The price is down from the historic highs of over $5 a gallon seen earlier this month.
However, it is still up from $3.095 this time a year ago.
The price slashes come as crude oil costs have continued to decline in recent weeks amid ongoing concerns that a global recession may be looming.
Brent crude fell 8 cents, or 0.1 percent, at $109.97 a barrel by 08:15 GMT on Friday.
Meanwhile, U.S. West Texas Intermediate (WTI) crude was also down 8 cents at $104.19.
The drop from historic highs reached after Russia’s invasion of Ukraine comes amid widespread concern over a global economic slowdown and a drop in demand owing to rising interest rates and inflation.
Federal Reserve Chairman Jerome Powell on Wednesday appeared to add fuel to the fire when he told the Committee on Banking, Housing, and Urban Affairs that the United States faces an “uncertain” economic environment and could see further inflation “surprises.”
“Making appropriate monetary policy in this uncertain environment requires a recognition that the economy often evolves in unexpected ways,” Powell said.
“Inflation has obviously surprised to the upside over the past year, and further surprises could be in store.
“We therefore will need to be nimble in responding to incoming data and the evolving outlook.
“And we will strive to avoid adding uncertainty in what is already an extraordinarily challenging and uncertain time.”
The Fed chair added that the central bank remains “highly attentive to inflation risks and determined to take the measures necessary to restore price stability,” while adding that the American economy is “very strong and well-positioned to handle tighter monetary policy.”
His comments came after the Fed raised the benchmark interest rate by 75 basis points earlier this month.
Some experts believe more gasoline price drops might be expected in the future, which would ease some of the pain that Americans have been feeling at the pump.
“Future demand destruction from a possible looming recession is countering near-term real demand that remains very strong,” said Dennis Kissler, senior vice president of trading at BOK Financial.
“As long as the fear of a recession remains, the near-term strong demand is keeping crude choppy.”
Meanwhile, Patrick De Haan of consumer advocate GasBuddy.com said on Twitter on Monday that a third decline in gas prices might be possible, “with prices by July 4 falling to $4.75–$4.80/gal.”
However, OPIS energy analysis global head Tom Kloza told Fox Business Network on Friday that gas prices could climb to “apocalyptic” numbers if hurricane season were to wreak havoc on U.S. oil refiners, prompting production shutdowns.
“I think for gasoline, we go back above $5 and apocalyptic numbers come into play with hurricanes,” Kloza said.
“The thing that people have to watch and is really insidious for inflation are the values for diesel and jet fuel. Stocks of those fuels are not building, they’re tight internationally and that’s where we’re going to have to pay the piper in the last 100 days of the year.”
In 2017, U.S. gas prices hit two-year highs after Hurricane Harvey knocked out over 20 percent of America’s refining capacity and hindered shipments.
Kloza noted that July will be the highest demand month and that any refining infrastructure that might get damaged through hurricanes could, in turn, push gas prices higher.
“July, without question, is the highest demand month,” Kloza added.
“In July and August, we really have to cross our fingers that no refining infrastructure gets damaged by hurricanes or by the electric grid, which seems to be not incredibly stable in parts of the Gulf Coast.”
Meanwhile, the Biden administration has called on U.S. oil companies to boost production and asked lawmakers in Congress to suspend the gas tax for three months amid soaring energy prices.