When Will Gas Prices Go Down?
August 3, 2022
As of August 3, 2022, the average national gas price was $4.163, according to AAA. That’s about 0.85 cents cheaper than the highest national average recorded in mid-June. This price decrease comes as crude oil prices are beginning to fall.
While some experts expect gas prices to continue to decline, it can be hard to tell if this trend will continue. As Amos Hochstein, a State Department senior advisor for energy security, said on CBS’s Face the Nation, “energy prices are highly volatile, making it difficult to make any predictions.”
What do future gas prices look like? Will they continue to go down? Keep reading to find out.
The Federal Reserve recently increased interest rates to pull down demand and tame inflation. While this could lead to more unemployment, it could also slow down price increases. Because investors have grown worried about a global economic downturn, this has led to a slump in the crude oil market resulting in a drop in gas prices.
Sanctions On Russian Oil
While sanctions on Russian oil have had less impact on global supply than expected, European sanctions could further strain that oil supply in the coming months.
By December, the European Union will entirely ban Russian maritime deliveries of crude oil, and in February, it will ban shipments of refined oil products from Russia. An insurance ban on ships carrying Russian oil will also be phased in, making it more difficult for Russia to export oil products worldwide. This could all result in rising oil prices.
Weather on the Gulf Coast
According to the National Weather Service, this year’s hurricane season could be more active than usual. Unfortunately, a hurricane on the Gulf Coast could knock out an oil refinery at any time. In 2020, the U.S. lost two refineries due to an explosion and a natural disaster. Losing another one could devastate the oil supply and push up fuel prices higher than we’ve already seen.
The U.S. Gas Demand
As more people hit the road this summer, you may see prices jump between now and Labor Day. It’s also possible that falling prices could increase demand, ultimately pushing prices up again.
According to Patrick De Haan, the head petroleum analyst at GasBuddy, national prices could fall below $4 a gallon in Mid-August. Still, only if gas demand doesn’t surge, the country avoids a destructive hurricane, and the economy continues to cool down.
What Will Happen?
As of right now, gas prices are continuing to fall. However, many factors can influence this trend. So far, it looks as if oil prices won’t be expected to rise until December and into 2023. Yet, many unforeseen agents could prematurely raise gas prices.
We’ll just have to wait and see.
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