Gas prices have trended lower in recent weeks, and while several shifting aspects could affect the outlook, experts forecast the national average is prone to proceed declining.
The common price for a gallon of gas has eased to $3.44, which is 5.6 cents lower than a month ago and 37.2 cents cheaper than it was presently last yr, in response to the gas price-tracking app GasBuddy.
Above all else, gas prices are influenced by the price of crude oil. Oil was trading at the bottom level in six months on Tuesday, in response to the West Texas Intermediate measure, a benchmark used widely by analysts.
Weaker oil prices have allowed gas prices to fall. After a brutal start of the week for the stock market, increased concern about an economic slowdown has led to lower expectations for global oil demand and the present price per barrel of around $73 is now 10% lower than a month ago.
“With oil prices plummeting resulting from recent concerns over the U.S. economy after a poor jobs report, gasoline prices have seen downside in lots of states, with potential for more to hitch that trend this week,” Patrick De Haan, head of petroleum evaluation at GasBuddy, said in a report Monday.
Why gas prices are falling
Gas prices are likely to move by about 25 cents with a $10 swing in the value of oil, so any additional movement lower could allow pump prices to maintain falling.
However, it’s possible that oil prices could creep back up, which might likely upend forecasts for lower gas prices. Experts say that escalating conflict within the Middle East could disrupt oil markets, as prices would likely rise if oil supply from the region drops.
In a forecast Monday, the Energy Information Administration (EIA) said lower oil prices may not last, citing production cuts from Saudi Arabia and other oil-producing countries within the OPEC+ group. However the EIA continues to be encouraged about where gas prices are headed.
“Regardless that we expect oil prices to extend, we expect gasoline prices through this yr and next yr to stay lower than they were in 2023,” EIA Administrator Joe DeCarolis said in a release. “U.S. motorists are using less gasoline than they did before the pandemic, and we expect that to assist keep gasoline prices from climbing with oil prices.”
Seasonal trends will influence gas prices in the approaching weeks and months. Prices typically decline in the autumn because the summer driving season winds down around Labor Day. The drop in fuel demand coincides with an annual transition from summer-grade gasoline to a less expensive winter mix, which brings additional relief for drivers.
With that said, hurricane season is ongoing, and one bad storm impacting refinery operations could cause prices to soar.
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