Oil prices fall, but gasoline prices move up

07 May 2026, 15:33 · The Fresno Bee

There's been some lovely news about the war: new talk about peace negotiations between the United States, Israel, and Iran. The message was strong enough to recently send crude oil prices tumbling by more than 7% in New York and London.

But the declines have come with skepticism and one very big caveat. As much as the pain at the pump is real and due to the Iran war, don't expect gasoline prices to fall much, very soon. In fact, retail gasoline prices were up on the day crude fell. Not a lot, admittedly, but up.

AAA's price, reported early on May 6, was $4.54 per gallon, up about 5 cents from Tuesday and up 59.8% this year. GasBuddy's prices, available in the afternoon of May 6, was at $4.56 a gallon, up 1.9 cents from a day earlier and up nearly 62% for the year.

Prices probably won't come down for a while. Maybe not until the end of the summer, Patrick DeHaan, Gas Buddy's head of petroleum analysis, told NBC News recently.

For one thing, talk about a peace deal is mostly coming from the Trump Administration, which wants to end the war sooner rather than later. And President Trump has repeatedly said Iran wants to make a deal.

So far, the two sides are working with a 1-page proposal on how to restart the talks, The Wall Street Journal reported. The near-term goal is to get in-person talks started maybe next week in Islamabad, Pakistan.

If there is no deal, Trump says he will restart bombing and missile attacks on Iran, the Journal said.

Analyst: 'We've been down this road before'

Those watching the situation are starting to get a little jaded. Barrons noted this comment in a research note from Mizumo oil analyst Robert Yawger: "We have been down this road before, and the sense of optimism has faded to reality each time."

Secondly, gas prices tend to come down after crude prices, says Denton Cinquegrana, chief oil analyst at the Oil Price Information Service. OPIS collects the data used in AAA's daily price reports.

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In this case, price increases were set off by the Iran war and the closure of Strait of Hormuz. Before the war, about 20% of the world's crude oil passed daily through the passage between the Persian Gulf and Indian Ocean. The closure has affected most of the world's economies, but Japan and Asia most especially.

Moreover, said GasBuddy's DeHaan in an email with TheStreet, pricing data is usually not published until a day or so after the numbers are collected. If oil prices continue to decline, small price drops may show up at the gas pump in a few days or so.

U.S. average price highest in four years

So, in the meantime, one must persevere with gas prices at their highest level since June 2022, when both AAA and GasBuddy said the average U.S. prices topped $5 a gallon.

Prices didn't stay at those levels for long, data from the two sites say. By September 2022, in fact, the average price of regular unleaded had fallen under $4 a gallon.

Prices in the United States continue to be highest in the western states, with California suffering the highest prices. The statewide average was $6.16 a gallon this week, according to AAA data. And the highest prices was in isolated Mono County where the price was $7.044 a gallon.

The cheapest gas is still found in Oklahoma.

Falling oil prices did help boost the Standard & Poor's 500, Nasdaq and Nasdaq-100 indexes record levels.

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This story was originally published May 7, 2026 at 8:33 AM.