The national average price of regular gasoline fell below $4 a gallon for the first time since July, reaching $3.9788 on Tuesday, according to AAA. Prices dropped about 17 cents from a week earlier and nearly 39 cents from a month ago.
Energy inflation slowed in October. Energy prices rose 0.7% during the month, compared with a 5.2% increase in September, according to the Bureau of Labor Statistics. The BLS gasoline index climbed 1% in October after jumping 9.1% in September.
Bespoke Investment Group noted that gasoline prices typically decline at this time of year. "While lower oil prices have been a tailwind for the relief at the pump, it's also perfectly normal for gas prices to be falling at this time of year, so if they weren't, there would really be something wrong," the firm said.
International oil benchmark Brent crude fell below $90 a barrel on Tuesday for the first time since August. Comments from U.S. President Donald Trump fueled hopes for an end to Washington's nearly nine-month conflict with Iran, helping drive oil lower. Regional crude exports from the Persian Gulf have returned to an estimated 80% to 85% of prewar levels, including pipeline shipments, according to ING.
Federal Reserve Governor Christopher Waller cautioned that energy shocks may produce longer-lasting effects on inflation than they did before the pandemic. "While I am pleased to see energy prices down from their high rates over the past week or so, they are still quite elevated relative to the start of the year, and the ultimate effect on inflation will depend on what levels are sustained," Waller said.