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Oil prices fell into bear market territory on Wednesday thanks to global tensions and fears about oversupply – but that could spell good news for drivers over the coming weeks.
West Texas Intermediate (WTI) crude fell more than 3.3 percent to $51.68 per barrel – the lowest settle since January. Brent crude fell more than 2.2 percent, to $60.63 per barrel. WTI has fallen more than 20 percent since its recent highs.
The main driver of sliding oil prices recently, according to GasBuddy.com senior petroleum analyst Patrick DeHaan, is economic uncertainty over trade policy – and a potential slowdown in U.S. economic growth limiting oil consumption.
Along with oil prices, gas prices have fallen, too. The national average as of Wednesday, according to AAA, was $2.79 per gallon – down from $2.81 one week ago and $2.89 one month ago. Gas prices fell below $2.80 per gallon for the first time in nearly two months.
But recent moves in oil prices suggest there is still room to fall.
“I think we have a good distance to go before gas prices catch up to the recent plunge in oil,” DeHaan told FOX Business.
Some gas stations, including in Texas, have already begun to sell gas at prices below $2.00 per gallon. DeHaan said consumers shouldn’t be surprised if a “few hundred” also push below the $2.00 per gallon mark over the next week, and perhaps even thousands over the next two.
Already, 12 percent of stations have prices below $2.50 per gallon.
That could change, however, should the Trump administration strike deals with Mexico and China, DeHaan noted.
On the flip side for the auto industry, experts are warning the average vehicle price could climb by $1,300 as a result of the potential tariffs on Mexico.
The Trump administration, meanwhile, held a meeting in D.C. with trade representatives from Mexico – as the president has threatened to implement an escalating tariff on goods from Mexico on Monday.
Also contributing to the slide in oil prices on Wednesday was data showing U.S. stockpiles rose more than expected during the week that ended on Friday.