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Gas prices decline, helping cool inflation in May

Falling gas prices were one of the main drivers behind cooling consumer price increases last month, according to Bureau of Labor Statistics data released Wednesday.

The gasoline index declined 3.6% in May on a monthly basis, compared to a 2.8% spike in April. Overall, headline inflation was unchanged from April, down from the previous month's 0.3% gain in prices.

The decrease in prices at the pump came as wholesale prices fell and crude oil declined last month. Gasoline recently saw its biggest weekly decline of the year.

On Wednesday, the national average for gasoline stood at $3.45 per gallon, down about $0.17 from one month ago, according to AAA data.

While oil prices trended lower in April, crude futures have recently rebounded and are expected to jump this summer on demand for transportation and cooling.

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Goldman Sachs analysts forecast Brent crude prices will rise to $86 per barrel, almost a 7% increase from current levels.

On Wednesday, West Texas Intermediate (CL=F) was trading just over $79 per barrel, while Brent (BZ=F), the international benchmark price, hovered above $83 per barrel.

Falling gas prices helped drive the overall energy index down 2% over the month of May after rising 1.1% in April. On an annual basis, the gas index rose 2.2% while energy prices were up 3.7%.

The BLS data also noted the fuel oil index decreased by 0.4% month over month, while electricity remained unchanged in May. The natural gas index decreased 0.8% month over month.

Natural gas prices (NG=F) have risen in recent weeks, working off a recent supply glut.

A sign at a Sinclair gas station is seen next to an Arco gas station advertising gasoline prices, Monday, June 10, 2024, in Long Beach, Calif. (AP Photo/Ryan Sun)
A sign at a Sinclair gas station is seen next to an Arco gas station advertising gasoline prices, Monday, June 10, 2024, in Long Beach, Calif. (AP Photo/Ryan Sun) (ASSOCIATED PRESS)

Read more about May's CPI report and inflation:

Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.

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