Gasoline prices should drop under $5 a gallon and stay there.

That’s the analysis of Patrick De Haan, head petroleum analyst at GasBuddy, which tracks prices.

Oil has been the rare glimmer of good economic news in recent days. President Donald Trump exempted oil prices from tariffs, and crude oil prices have been plunging for various reasons.

One is that tariffs slow demand and could help plunge the country near or into a recession.

“Tariffs are causing concerns about slowing global economic activity and recession. This in turn slows demand for oil,” said Gocke Soydemir, Foster Farms endowed professor of business economics at California State Stanislaus.

With state and local taxes and fees, California’s average gasoline price is still expected to remain far above the national average. On Monday, the U.S. average for a gallon of regular gasoline was $3.26, according to AAA.

In California, it was $4.96, the highest average in the nation. Hawaii was second at $4.49. Mississippi has the least expensive gasoline at $2.75 a gallon.

The California price is up slightly from a month ago but well below the $5.34 recorded at this time last year.

How much lower can gas prices go?

“California is becoming more of an outlier and more isolationist because of its stringent policies. It’s notoriously difficult to predict,” De Haan said.

But because of lower demand, anticipated production increases by OPEC+, a group of oil producing nations, and state refineries running at or near capacity, he saw California gasoline prices around $4.50 a gallon.

“If things go well,” De Haan said, “summer’s price could be $4.25 to $4.45. If things don’t go perfectly, the mid-4s.”

In any event, he said, “I don’t really see $5 unless something unforeseen happens.”

Trump exempted oil from the tariffs announced last week, giving no specific reason. The 2020 U.S.-Mexico-Canada trade agreement, which he negotiated during his first term, exempts oil and is still in effect. Canada is by far the biggest source of U.S. petroleum imports, according to the federal Energy Information Administration.

Trump’s action on oil was no surprise to experts.

“When the Trump administration took office, we knew the expectation was energy prices would come down,” said Sanjay Varshney, professor of finance at Cal State Sacramento.

Trump throughout his 2024 campaign promised to encourage more drilling for domestic oil and reduce the U.S. reliance on foreign sources. That’s consistent with his tariff policies, which aim to invigorate U.S. domestic production.

“If energy prices are cheap, it gives us a competitive edge, and energy is plentiful here,” Varshney said.