Gas prices are 30% higher than last year - but fuel demand is cratering to pandemic levels of 2 years ago

• The average gallon of gas in the US costs $4.113 today, compared to $4.800 one month ago.
• Prices have declined in recent weeks, however they remain 28.9% higher than one year ago's $3.190 rate.

US gas prices declined to $4.113 Friday, down from $4.800 a month ago. But prices remain 28.9% higher than last year, according to AAA data.

Expensive pump prices in addition to soaring inflation has put pressure on Americans, and demand has shown signs of waning even through the typically-high demand summer driving season.

Data from the Energy Information Administration revealed that gas demand dropped from 9.25 million barrels per day to 8.54 million barrels per day last week.

That's on par with demand levels at the end of July 2020 when the COVID-19 pandemic kept drivers off the road.

The EIA also noted that domestic gasoline stockpiles increased marginally by 200,000 barrels to 225.3 million barrels. The trend could bring further relief at the pump across the US if supply continues to rise and demand moves the opposite way.

Prices at the pump have declined 10 cents over the last week, and crude oil prices have also declined below $90 a barrel for the first time since Russia invaded Ukraine.

OPEC+ announced Wednesday it would boost crude output modestly for September, although the slight increase will likely have minimal impact on oil prices.

Meanwhile, four months ago gas prices had soared so high that demand destruction appeared to be setting in right as summer travel season was ramping up. In May, demand on a four-week rolling basis hit its lowest point for that time of year since 2013, excluding 2020.

Then in June gas prices in the US hit a nationwide average of $5 per gallon for the first time in history. All 50 states were paying more than $4.40 on average, with some California cities paying above $7 or $8 per gallon.

At the time, JPMorgan analysts had forecasted prices could shoot above $6 on average.

Ed Morse, global head of commodities research at Citi said that the dip in crude points to weakening gasoline demand as recession fears increase in the US.

"It means the market is no longer expecting tightness ahead, it's expecting things to loosen up," Morse told CNBC Thursday. "It's supply purely playing against demand."