Gasoline prices expected to fall as oil hovers near $60 per barrel

Gasoline prices are expected to fall in the weeks ahead if the sharp drop in oil prices sparked by a US-China trade war holds.

On Friday, the national average of gasoline sat at $3.21 per gallon, about $0.13 higher than a month ago, but nearly $0.42 lower than a year ago, according to AAA data.

Over the past week, prices at the pump declined $0.05 per gallon as oil has tumbled, partially reversing a recent monthly spike amid refinery maintenance and a switch to more expensive summer blends of gasoline.

"Gasoline prices are expected to continue to decline with the falling oil prices that we have seen over the last week," said Andy Lipow, president of Lipow Oil Associates.

"I expect the national retail price of gasoline to fall about $0.15 per gallon over the next two weeks, and we could see additional declines afterward if the low crude oil prices stay with us," he added.

On Friday, oil was on pace to close with losses for a second week in a row as West Texas Intermediate  futures hovered near $60 per barrel. Brent, the international benchmark, traded near $63 per barrel.

Crude futures have shaved off more than $10 per barrel since President Trump announced a sweeping tariff plan on April 2, followed by a decision by the Organization of Petroleum Exporting Countries and its allies to increase output in May.

Trump's 90-day tariff pause on some 75 countries gave a sharp, short-lived bounce to oil as levies on Chinese-made goods increased to a total of 145%. Traders fear a trade war with the largest importer of crude will dampen demand.

Gasoline prices "may eventually fall below $3 per gallon unless things with the economy start to brighten again. We've never seen the status quo shifted so significantly like this and oil prices aren't liking what's going on," Patrick De Haan, head of petroleum analysis at GasBuddy, told Yahoo Finance.

Lower gasoline prices compared to a year ago have helped inflation cool in the month of March.

The latest Consumer Price Index reading on Thursday showed the gasoline index fell an annualized 9.8% last month, helping the overall energy index decline 3.3% over the same period.