Drivers are starting to feel some relief at the pump as U.S. gas prices fall to just over $4 a gallon, marking the seventh straight week of decline. This price drop comes as consumers grapple with higher prices on everything from food to rent to everyday goods. Robert Sinclair, a spokesperson for AAA Northeast, joined Cheddar News to discuss. “We're burning about 25 million gallons less per day compared to where we were, say, a year ago, and that's leading the things to go down now," he said. "Usually at the end of the summer driving season, we see less demand with kids going back to school and parents going back to work, no more vacations. But it could be that we've already seen that drop because of the higher prices."

Opening Bell

Gas Prices Fall for Seventh Straight Week

for more on this. It's bringing robert Sinclair spokesman from Triple A robert gas prices have fallen for almost two months straight now approaching $4 a gallon, which compared to recent highs, that seems like a nice decline. But I can vividly remember when I was talking about about a year or so ago at gasping $3.04 at a high. So relative to that, it is, it is nowhere near where we were nonetheless is their sentiment that this decline potentially has more room to run as I cross my fingers that you're going to say yes, it certainly could. And it has to do with the price of crude oil which continues to go down. We have peaked at 1 22 11 back on june 8th and we're just over $90 a barrel now. But it's bad news that's sending the price of crude oil. Lower traders are worried about global inflation and less demand for petroleum products so they're kind of heading for the exits and looking for other investments and driving is down, drivers just don't have the elasticity in their budgets to deal with the high prices that we have been seeing and demand is down roughly 8% compared to a year ago. So we're burning about 25 million gallons less per day compared to where we were say a year ago and that's leading the things to go down now. We are in the summer driving season usually at the end of the summer driving season, we see less demand with kids going back to school and parents going back to work, no more vacations. But it could be that we've already seen that drop because of the higher prices. So it's gonna be kind of wait and see on that particular part of the demand story and the gas price and crude oil story that being said then we're only a few weeks a few weeks out from the all busy kind of Labor Day weekend. Right, What are you expecting to see this Labor Day? We love triple A when they give us the projections of the actual number of people who have taken to the road and then what gas prices are then it will be very interesting to see what those projections tell us for a labor day. I have a feeling that we might be flat compared to last year. People are still very eager to go out and do something after being cooped up for the past couple of years. But given the demand lower demand numbers that we're already seeing, it's, it's really hard to predict. So we have to stay tuned, well, stay tuned and I think I'm so far planning a road trip. It'd be nice if those gas prices come down a little bit to make that road trip. Um, not be as painful at the pump. Can you break down though And you, you touched on this a little bit a few moments ago in terms of why we're seeing gas prices decline because it doesn't seem like it's because there is higher supply now and demand is there and supply is able to kind of, you know, take care of demand and thus the price come down. It does actually seem like it's a factor of people feeling the pinch and then and then pulling back without a doubt that's the case. You know, we did a driver's survey back in March and we asked drivers what the pain point was for the price of gasoline and 60% said $4 a gallon, 75% said $5 a gallon. So we are still in that range. And so I think that's why we are seeing a manifestation of the responses to that survey with drivers driving less. They're not eating out as much, they're cutting back on major purchases like a big appliance. But I have to hearken back to March of 2018 when we had the same survey and 40% of drivers then during a good economy said that $3 a gallon was the pain point where they'd have to cut back on on various expenses and you know, it's that core 40% and if it's $3 a gallon back then in 2018 during a good economy, I can imagine that price might be even lower now, maybe 2 50 a gallon, that's the pain point. So We're at over $4, you know, getting close to $4 a gallon right now. But I don't think it's time to break out champagne just yet because a significant number of drivers would still be suffering even if we got down to $3 a gallon. Yeah. To your point there, that's what I was saying earlier. I vividly remember when I was put on my anchor voice, it was like $3.04 a gallon at a high and now we would love, we would celebrate $3.04 you know, as a high for for gas. Right now, that being said, I'm sorry. It's just going to say you might see prices near that range if you head down south because there are actually 20 states in the $3 per gallon range and they are mostly in the south and the midwest, the cheapest gasoline to be had is in texas. And that corresponds with the fact that a lot of the oil and gas infrastructure is there in the gulf coast in texas, Louisiana, Mississippi and Alabama. So you're sort of closer to the source of the product and that cuts down on distribution prices. So if you're gonna take that road trip at least to head south, it'll be cheaper apparently. So just getting from here to the kind of the border where some of that oil is cheaper. In the meantime we do know that the world, the world's oil exporting countries. Opec obviously have agreed to a small increase in oil output next month. Do you expect with that supply side increase that to have any real impact on gas prices small is the operative word, the an extra 640,000 barrels per day for this month and an extra 100,000 barrels per day for next month. Opec Plus has announced consider that global consumption is 100 million barrels per day and we were talking about less than 1%. Now there might be a positive psychological effect or, or negative if you're an investor where investors start to say, well there's gonna be more oil and gasoline on the market that's going to drop the price. So I'll head for the exits and find other investments and that might make the price of crude drop even more. But in terms of, you know, real market influences, it's not that big a deal. But the oil and gasoline market is extremely fickle something real. Or even imagine just the threat of something happening can lead to significant price changes as far as crude oil is concerned. And with the retail gasoline prices, so we have to watch the market very carefully. I mean, by the end of this conversation, something could happen that could radically affect gasoline prices and crude oil prices. Um, and also we've got the big X factor of hurricanes, uh, for major Katrina or rita type event from 2005 were to hit the gulf coast. Uh, we could see prices go places we have never seen before To that point of the potential of something that could happen. There's a lot of chatter about whether we're in a recession and whether or not we go into a more robust recession, like, like some economists are actually predicting what could that, the impact of that beyond gas prices. Do you think we'll see anything similar to what we saw in 08 or even at the beginning of the pandemic? Well, you remember oh eight, we began with the highest gas prices that we had ever seen at $4 a gallon. And when the recession hit, prices fell substantially by the end of the year and during the pandemic, we actually saw negative prices or in crude oil on april 20th 2020 when I believe it was negative $37 a barrel. Um, I don't think things will get that bad even with a significant recession, but if that recession comes with lower employment, um with fewer folks working and less economic activity than we could see lower prices when the economy is good, people are driving to work, construction is happening, vehicles are heading across the country, Burning more fuel and that leads prices to go higher. The economy is bad, they go lower. So what do you want? Bad economy with lower prices or a good economy of higher prices, but really quickly, I probably got only 30 seconds here, but the reality is, is higher gas prices are impacting, you know, price hikes as they start to come down. Is that a good, you know, a good thing for the inflation print since the reality is, that's probably that's the most volatile component of inflation right now. It is. But I think what you need to really be watching is the price of diesel because it's going to be a diesel burning truck, that's easing the supply chain problems that we're having and diesel is still 5 21 per gallon and the average truck holds 300 gallons. So at 5 21 per gallon, that's more than $1500 to fill up that truck compared to a year ago when I was 3 29 a gallon and would have cost you $987 to fill up that truck. So that extra expense, as far as diesel and the trucks delivering those supplies that we need get passed on to consumers and I think that's one of the main drivers. If I can use that pun in inflation these days, so watch the price of diesel, that's going to make a big difference. It has fallen but not fallen enough certainly to make a dent on inflation, robert, really appreciate your time and your insight robert, Sinclair spokesperson from Triple AA