Americans may finally be able to get some relief at gas stations.

According to the data from AAA, the national average price of regular gasoline in the United States fell to $3.9788 per gallon on Tuesday, below $4 for the first time since July. Compared to a week ago, the price has dropped by about 17 cents; compared to a month ago, it has decreased by nearly 39 cents.

This decline occurred after a noticeable slowdown in energy inflation in October. Data from the U.S. Bureau of Labor Statistics shows that energy prices rose by 0.7% that month, far lower than the 5.2% increase in September. The gasoline index, which is BLS, rose by 1% that month, compared to a 9.1% increase in September.

Bespoke Investment Group pointed out that gasoline prices usually also fall at this time of year, so the recent partial relief is due to seasonal factors.

The institution stated, "Although lower oil prices have helped to bring down gas station prices, it is completely normal for gasoline prices to fall at this time of year. Therefore, if there were no decline, that would be the real problem."

Crude Oil and Inflation

Gas station prices fell following a significant drop in crude oil prices. On Tuesday, the international crude oil benchmark, Brent crude, briefly dropped below $90 per barrel for the first time since August, after remarks by U.S. President Donald Trump boosted hopes that the nearly nine-month conflict between Washington and Iran could come to an end.

The resumption of crude oil flows in the Persian Gulf has also alleviated supply concerns. ING Citing data, regional crude oil exports, including those transported through pipelines, have returned to about 80% to 85% of pre-war levels.

Analyst ING writes: 'As hopes for a cooling of tensions in the Middle East diminish the geopolitical risk premium, the energy market remains under pressure. As supply flows in the Gulf region continue to recover, oil prices have fallen further, and so have natural gas prices in Europe.'

However, Federal Reserve governor Christopher Waller warned on Tuesday that the impact of the energy shock on inflation could be more lasting compared to before the pandemic.

He said, "Although I am pleased to see energy prices fall from their high levels over the past week or so, they are still quite high compared to the beginning of the year. The ultimate impact on inflation will depend on what level these prices can be maintained at."