The national average price for a gallon of regular gasoline dropped to $3.57, a six-cent decrease from the previous week, according to a Thursday gas report by AAA.
"The oil market volatility is leading to lower prices," AAA spokesperson Andrew Gross said in a statement. "And we are also in a pre-summer driving season lull regarding domestic demand. These two factors should keep pump prices drifting lower for now."
In addition, gas demand decreased from 9.51 to 8.62 million barrels a day the previous week, AAA reported.
"The drop in demand is more in line with what market observers expected last week," AAA said.
Plus, fears of a recession amid rising interest rates have affected gas prices, AAA said. In fact, the Federal Reserve increased interest rates by another 25 basis points this month, despite recent bank closures and the uncertainty the closures have spread across the industry.
"If a recession occurs, oil demand and prices will likely decline," AAA said.
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While gas prices dropped across the nation, some states saw larger decreases than others. These were the states that saw the largest decrease in average gasoline prices, according to AAA:
These were the 10 least expensive markets, based on AAA’s research:
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As gas prices dropped last week, interest rates increased, fueling fears of a recession, AAA reported. But whether the nation will fall into a recession is unclear.
A recession is traditionally described as a period of prolonged downturn in economic activity, according to Investopedia. While the government has not officially declared a recession, there were two consecutive drops in GDP last year.
Moreover, financial institutions such as Bank of America and First National Bank of Omaha have predicted recessions for 2023.
"Federal rate hikes are finally bringing down inflation, but economic indicators – manufacturing, housing, jobs, banking – are flashing signs of an economic recession," Angeles Investment CIO Michael Rosen said.
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