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Gas prices continue to drop, but the relief may be temporary

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Posted at 5:36 PM, Jul 07, 2022
and last updated 2022-07-07 21:39:50-04

PHOENIX  — If there is one thing nearly everyone is paying attention to it is gas prices.

According to the US Energy Information Agency the price for a gallon of regular has fallen about five percent since the middle of June in western states. This comes on the heels of a 44% increase that started in February.

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Since oil makes up the biggest share of the cost of a gallon of gas, the two prices are highly correlated and have been for over two decades. Oil prices recently dropped below $100 for the first time since May. The drop in oil prices is attributed to recession fears by market analysts, which is impacting demand.

In April of this year demand for oil dropped below the same period in 2021. Outside of the pandemic, demand for oil does not typically drop below the year prior.

What does this mean to your wallet?

ABC15 analyzed the prices at 500 gas stations across the Valley from the GasBuddy station prices map. The metro-wide average for a regular gallon of gas in the Valley of the Sun is $5.29. The lowest-priced station was $4.68, and the highest price was $6.09.

Broken down by region, fill-ups in the East Valley are slightly higher than in other areas at $5.31. The opposite is true for the West Valley which is paying about $5.24. All three regions do have stations priced under $5.

With the fluctuations in the oil markets, analysts at Gas Buddy are unsure if prices will hold or continue to drop. Any further geopolitical tensions or natural disasters on the gulf coast could send oil prices spiking, which would be followed shortly after by gas prices.