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Average U.S. gas prices fall below $4 for first time in months

Yahoo Finance Live anchors discuss gas prices finally dipping below $4 a gallon and the overall energy market.

Video Transcript

BRIAN SOZZI: All right, drivers in the US are breathing a small sigh of relief as the nationwide average price for gas has fallen below $4.00 per gallon for the first time since March. Average price is now set at $3.99 per gallon after hitting a record high of over $5.00 per gallon in June.

And Brad, like we just mentioned, do not discount how much the market absolutely loves to hear this. Of course, there is the consumer angle. This is major. This is millions and millions of dollars in relief to American households. Those households that were not spending as much in the second quarter at a Walmart, at a Target because of high gas prices, they have now pulled back. They now have more discretionary income. But also for companies.

BRAD SMITH: Yeah.

BRIAN SOZZI: Those companies, like a Walmart, operating these big giant trucks. Diesel prices coming back. Good for their profits, too.

BRAD SMITH: You know, the other element of this, too, think about an Uber and a Lyft where you've got those companies, for the drivers that-- and the operating model, they've looked at gas prices and said, yeah, we're probably just gonna have to pass that through to the consumer anyway. That's gonna be reflected in their prices.

And so for Uber and Lyft, that lowering of the gas prices, or of gas prices coming down, or at least back into kind of an approachable level, if you will, I think all of that has a much larger implication on where people are gonna be more comfortable getting back into that Uber or Lyft experience.

Don't look now, but I mean, since late July, the last week of July, Uber shares, they've moved up by about 45% from some of those late July levels that we've seen as well. And so that's something to keep a close eye on here. And how gas prices also play into that ridesharing model as well.

BRIAN SOZZI: Yeah, and you know, at the top of the show, we were talking about certain sectors that have done well versus the lows. One of them that has relatively under-performed from change is energy. I believe off the June lows, energy-- the energy sector of the S&P 500 only up close to 3%. Why? Because we are now seeing this pullback.

And you can see on that chart there, we're now seeing that pullback in energy prices. And you know, suddenly, these great quarters from Exxon, Chevron, Occidental, that we saw really in the second quarter-- a little bit in the first quarter, but mostly the second quarter-- you have to wonder, was that peak good? Is it as good as it got for oil companies in the second quarter? In the second half of the year, maybe the Street is just a little too optimistic.

BRAD SMITH: Well, one person that's been extremely optimistic on Occidental, we do know, is Warren Buffett, who has continued to advocate--

BRIAN SOZZI: Well, he's investing for the next 500 years. Yeah, 500 years.

BRAD SMITH: You know, unless he comes across Tony Stark's Arc Reactor--

BRIAN SOZZI: Yeah.

BRAD SMITH: --seeing those 500 years.

BRIAN SOZZI: You think he's bullish on "She-Hulk?" I think he likes "She-Hulk."

BRAD SMITH: He's got to, right? Why not?

BRIAN SOZZI: Oh, "She-Hulk."

BRAD SMITH: Warren Buffett, pro and--

BRIAN SOZZI: Let us know, Warren

BRAD SMITH: --bullish on "She-Hulk."

BRIAN SOZZI: Hit me up. Send me a text.