Gas prices continue to decline nationally as the average price for a gallon of regular gasoline dipped below $4 for the first time since March 5th, according to AAA data. It is an impressive decline since gasoline topped $5 per gallon on June 11th, however it is still 80 cents higher than the price of gas one year ago..

Brent crude has lost all of its gains since the Russian invasion of Ukraine on February 24th, however it is still up 20% for the year. West Texas Intermediate has done roughly the same performance-wise, and was hovering around $93.94 per barrel as of the close Thursday.

According to the Energy Information Agency, the price of crude is responsible for about 55% of the cost of retail gasoline.

Data from AAA shows demand destruction is beginning to have an effect on prices, as surveying drivers has shown they have begun driving less in response to high gas prices. However there has been some debate over the extent of the reduced demand, as well as the soundness of EIA data showing less demand. Rory Johnsson, a researcher at Commodity Context has argued the reduction in demand is likely being overstated, given the distorted pandemic-era data-estimation issues.

Johnston wrote in a recent note, “US gasoline demand probably isn’t especially strong at the moment and has likely been weakening counter-seasonally for more than a month; but, it isn’t shocking coming out of a fresh all-time high price spike and the extent of this slowdown is likely being exacerbated by the commercial decisions of wholesale market participants. Wider than usual errors in the WPSR [EIA’s Weekly Petroleum Status Report] estimates vs. the more-accurate PSM [Petroleum Supply Monthly] estimates through much of the pandemic era have also materially distorted comparisons between current data and data from 2020.”