Gas prices take slight dip due to fear of a global recession

You may have noticed a slight dip in price you’re paying at the gas pump. The price of oil declined 22% since last month, but experts say it may only be temporary. 

It’s kind of a double-edge sword. It’s great to see gas prices start to come down, but a local energy expert says it’s most likely due to a tough economic outlook here in the US and around the world. 

"Oddly over the last three or four weeks, I’ve been noticing them going down. That was kind of a welcomed surprise, considering that I’m pretty disappointed with having to spend a $100 or more to fill my tank," said motorist Lam Nguyen. 

The pain at the pump seems to be easing up a bit as people all over the country are hitting the road this summer.  On Tuesday, the price of crude oil dropped 9%, the largest drop since March. Trading for natural gas, gasoline and heating oil have also recently declined. Severin Borenstein, from the Energy Institute at Haas School of Business, says mounting fears about a global recession is affecting oil prices. 

"Overall, a slower economy means people drive less, people fly less, there’s less demand for oil to heat, and so forth mostly in other parts of the world. The reduction in demand causes a big drop in prices," Borenstein said.  

With so much economic uncertainty around the world, Borenstein says no one can predict if gas prices will continue to fall. He says most economists believe a recession is likely, and for now, people should do what they can to take advantage of lower gas prices.  

"This is a time when you’re likely to see big differences, sometimes even just down the block. So now’s a great time to really shop around and try to find those better prices. Which not only gets you a better deal, it also puts pressure on the high-priced stations to lower their prices more quickly," Borenstein said.  

But for some drivers, the price of gas is still too expensive.  

"Not enough, not enough. I’ve been emptying all of my money out, just to get from here to there," said Tyrone Nunley.  

Borenstein says unless oil prices drop like they did at the height of the pandemic, we’ll probably see gas prices get no lower than about $6 per gallon on average in California.