Gas Falls Below $4 as Demand Falters and Refinery Output Rises

Regional differences remain wide. California drivers still pay $5.10 a gallon on average, the highest in the country, while Texas and Oklahoma have seen prices dip below $3.50. The Gulf Coast region benefits from proximity to refineries and lower state taxes.

The White House welcomed the decline. Energy Secretary Jennifer Granholm said in a statement Wednesday that the administration would continue to monitor prices and urged refiners to pass savings to consumers.

AAA expects the national average to hold below $4 through August unless a hurricane disrupts Gulf Coast refining or OPEC+ cuts output more aggressively. The agency's latest weekly survey showed 62% of stations nationwide now selling regular gas below $4.

Gasoline futures on the New York Mercantile Exchange fell 2.3% Thursday to $2.45 a gallon, reflecting expectations of continued soft demand through the end of summer.

For drivers, the relief comes at a moment when other costs – rent, groceries, auto insurance – remain elevated. The consumer price index for June, due next week, will show whether the broader inflation picture is cooling as quickly as pump prices.