Gasoline prices have seen their biggest weekly decline of the year, but a spike at the pump could still come later this summer.
On Tuesday, the national average for gasoline stood at $3.52 per gallon, down $0.06 from one week ago, the largest weekly drop of 2024, according to AAA data.
The decline comes amid falling crude oil prices. Analysts predict gasoline could fall further in the coming days as wholesale prices have been sliding in recent weeks.
"Retail gasoline prices, or prices on the street, drop when wholesale costs drop," Tom Kloza, global head of energy analysis at OPIS, told Yahoo Finance on Tuesday.
"It’s not unusual to see street prices lag badly behind wholesale drops, and that is precisely what is occurring these days," he added.
However, Kloza predicts prices at the pump will rise again around August, particularly if storms threaten production near the Gulf of Mexico.
"We believe that gasoline will be like a Bactrian camel with two humps. We’re on our way down from the first hump but a second hump may come with intense heat, brisk demand, and hurricane worries in late July and August," he added.
Oil prices extended their declines on Tuesday following weaker-than-expected manufacturing data and OPEC+'s decision to start unwinding some voluntary cuts earlier than analysts had anticipated.
West Texas Intermediate (CL=F) slid to trade above $73 per barrel, while Brent (BZ=F), the international benchmark price, fell to hover above $77 per barrel.
Crude oil futures are down more than 14% from their April peak.
"My view is that we’re overreacting a bit on crude and we’ll find a point where gasoline tightens up once all schools get out. But one can see that fuel price disinflation will be a huge theme in June 2024," said Kloza.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.