Why Are U.S. Gas Prices Falling?

Fang Fang's boyfriend started a #GasPricesAreSoLow hashtag on Twitter and it's going about as well as you might guess.

In case anyone is genuinely wondering why gas prices are falling, prices peaked right about the same time the 4-week moving average of initial unemployment claims bottomed. There's a small window where the clueless will celebrate falling gas prices because they don't realize it hints at a rapid decline in economic activity.

Gasoline demand is where it was in 2021, when the economy was still partially locked down. The drop in demand has helped lift inventory. All good news for gasoline prices. I expect prices will keep falling, but I expect they will start falling even faster because the economy is weaknening, not because of a healthy increase in supply or because foreign policy becomes sane again.