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Gas prices are lower than when Russia invaded Ukraine

MARY LOUISE KELLY, HOST:

Gas prices have been falling steadily for several weeks. Prices are now cheaper than they were before Russia invaded Ukraine. And analysts say the price slide is not over. NPR's Camila Domonoske joins me to talk about what to expect at the pump. Hey, Camila.

CAMILA DOMONOSKE, BYLINE: Hi, Mary Louise.

KELLY: OK, so prices are sliding. Like, how much? How fast?

DOMONOSKE: Pretty significantly. We've seen prices go down by $0.10 a week for week after week now. It's also significant that they are going down pretty much everywhere. There was a point this fall where prices were going up in some places and not in others. But right now, really across the country, prices - depends what they are, but they're all going down. And, yeah, collectively as a nation, we are back to where we were in February, basically.

KELLY: And do we know what to expect in the coming days, weeks?

DOMONOSKE: Yeah. Well, first you got to look at why prices are shifting. There's supply and demand, the usual suspects in this mystery. Demand has gone down over the last couple of weeks. That's totally normal because it's colder. That happens in the winter - every reason to expect that that would continue. The amount of gasoline in storage went up. So supply is pretty strong. Again, we're looking at that to continue. And then oil prices, which are generally lower - they're moving around some, but they're lower overall now than they were in the summer. So overall, analysts at GasBuddy say we could see potentially a $3 national average by Christmas.

KELLY: Wow.

DOMONOSKE: That's more than $0.40 down from where we are now. AAA doesn't make predictions like that, but AAA spokesman Andrew Gross said he agrees prices are going to keep dropping.

ANDREW GROSS: I think for now, these declines that we've been seeing - we see no reason for that to change or at least over the next few weeks.

DOMONOSKE: OK. So there is a wildcard here. I can't go on the radio and...

KELLY: Lay it on us. Go for it.

DOMONOSKE: ...State with absolute confidence prices will continue to go down. OPEC+ is meeting this weekend. If they cut production, that could send oil prices up. In general with oil markets, I mean, you know, Mary Louise, something could always happen, right? In China, if COVID restrictions were to end and demand goes up, that could push prices up. There are these really unusual efforts to not only put an embargo on Russian crude but try to put a price cap on it in an unprecedented way. That's happening in the coming days. It's not intended to push prices up, but maybe it backfires. So there's the caveat, right? If the price of crude oil moves dramatically in some way, it could change the equation here. But based on everything we're seeing right now, prices will continue to trend down.

KELLY: OK. So you've just been laying out some of the factors on the world stage. Bring it to me, my car. I'm trying to fill it up. I'm at the pump. This seems to be good news for now.

DOMONOSKE: Absolutely. Prices are dropping, expected to go down further. The timing here is - you know, it's coming ahead of the holidays. People are looking at holiday shopping. It's also coming at a time when saving rates are low. We know people are putting less in their bank accounts. Credit cards are high. People are carrying big balances. And, again, holidays are coming up. People are shopping. It's probably a good time to have a little wiggle room in their budgets. And gas prices, we also know, play a really outsize impact on people's understanding of the economy. We see those numbers. We feel those numbers, right?

KELLY: Camila, before I let you go, bring us up to speed on what is happening with diesel. We hear less about that than about gas, but there was all this concern recently that there might be a possible diesel shortage.

DOMONOSKE: Yeah. Supply is going up. Prices - they are still higher than they were last year, but they are going down. So this is good news for the diesel market. And, again, it's good timing. Holiday shopping season is also holiday shipping season, and we move all those boxes around on trucks that are powered by diesel.

KELLY: NPR's Camila Domonoske. Thank you.

DOMONOSKE: Thank you. Transcript provided by NPR, Copyright NPR.

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Camila Flamiano Domonoske covers cars, energy and the future of mobility for NPR's Business Desk.
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