U.S. Gas Prices Fall Below Key Threshold For The First Time Since July as Oil Keeps Dropping

Gas prices in the U.S. fell below $4 a gallon in average for the first time since July as oil keeps dropping amid hopes that the war in Iran won’t resume.

AAA’s National Average stood at $3.9788 on Tuesday, compared to almost $4.2 a gallon a week ago. However, the figure still stands far above the $3.07 from this time last year. Seasonal factors including the end of summer driving and Daylight Saving Time played a role in the decrease.

Over half of all states now have an average price below $4. However, experts consulted by CNN said consumers should not expect prices to fall below $3 a gallon soon.

Oil prices could keep dropping amid hopes that the Iran war might not return to full-fledged hostilities.

President Donald Trump said in a social media post on Monday night that he had an “excellent” conversation with Qatari Prime Minister Mohammed bin Abdulrahman bin Jassim Al Thani about the course of the war.

“Qatar, Saudi Arabia, UAE, Bahrain, Kuwait, and others, would prefer the status quo, in other words, a continuation of the Greatest Naval Blockade in History, and the new Operation Iron Gate — Therefore, Land and Sea,” Trump said in a passage of the post, in reference to a decision to also block Iranian exports through land, not only sea.

Trump said, the U.S. remains “locked and loaded” to resume strikes but “at this point, however, that seems to be quite unlikely.”

“Israel, and the entire Middle East, are protected from Iranian danger and threats. We are seeing positive momentum toward an end to this Conflict, and will ensure that America’s interests are at all times protected. At the conclusion of this Military Engagement, the American People, and the World, will be far safer and more secure,” Trump concluded.

However, the impact from the past months are already having an impact on the economy. The Bureau of Labor Statistics detailed that the Consumer Price Index climbed 0.4% last month, compared to the 0.3% expected by analysts. Core CPI, which excludes more volatile components like food and energy, also climbed 0.3%, compared to the 0.2% expected.

Federal Reserve Governor Christopher Waller said on Monday he would back “more robust action” if the inflation reading was higher than expected. “In that case, I believe a 50 basis point hike in the policy rate should be considered at the December meeting,” he said, adding that a quarter-point hike “would put our credibility at risk, a risk I am not eager to take.”