Chicago Mercantile: Certain market data is the property of Chicago Mercantile Exchange Inc. US market indices are shown in real time, except for the S&P 500 which is refreshed every two minutes. Your CNN account Log in to your CNN account “If we return to economic prosperity, we’re going to return to the same gas price explosion as last year.” “We’re not awash in oil and we could very quickly be in a danger zone,” De Haan said. However, De Haan cautions there are at least two wildcards that could send gas prices shooting higher once again: A powerful hurricane that knocks out major refineries or an economic rebound that drives up demand for energy.ĭe Haan notes that gasoline and oil inventories remain relatively low, leaving them subject to a demand spike. “I do expect summer gas prices will be rather tame,” he said. GasBuddy’s De Haan said the odds are rising that the national average does not hit $4 a gallon this summer, a shift from his previous call for that milestone to be hit as soon as this month. Looking ahead, gas prices will probably remain far away from last summer’s peak. In California, drivers face an average of $4.80 a gallon for regular gas, though that is down from $5.96 a year ago. For instance, in Arizona the average price for regular gasoline stands at $4.67 a gallon – down just slightly from $4.75 a gallon a year ago. Some US states have not found relief this spring. Few people were able to enjoy cheap gas back then. Of course, that plunge was driven by the Covid-19 pandemic. To be sure, gas prices are not nearly as cheap as back in 2020 when the national average crashed below $2 a gallon. The national average for diesel – a key fuel in the economy because of it powers trucks that transports consumer goods – has dropped by 28% over the past year to $4 a gallon today. In fact, annual US oil output this year is projected to surpass the pre-Covid record set in 2019, according to the Energy Information Administration.Īll of this has helped depress not just gasoline prices but diesel, too. US oil production also continues to gradually rebound, serving as a powerful counter to production cuts by OPEC and its allies. The Federal Reserve’s war on inflation, marked by 10 straight interest rate hikes, has also driven down oil and other commodities.īut there are also positive factors behind the tamer gas prices: The doomsday scenario of Russia’s oil production getting derailed has not materialized, even after more than a year of the war in Ukraine. That in turn has driven down the price of gasoline and other petroleum products. “The American consumer is slightly smiling at the lower price of gasoline but I don’t think it’s a full-blown smile yet because the overall economic feeling is careful.”įears of a recession – driven in part by high inflation – have helped keep a lid on oil prices. “We’ve seen a lot of improvement,” said Patrick De Haan, head of petroleum analysis at GasBuddy. But the fact gas prices are much closer to $4 than $5 is a clear positive for consumers as they gear up for the start of summer driving season and more evidence of the economy-wide inflation cooldown. There are multiple reasons for the cheaper gas – and not all of them are good. That’s down 21% from a year ago when the average was $4.47 a gallon and 29% from the June 2022 record of $5.02 a gallon. But gas prices are miles away from last summer’s nightmare.Īt this point last year, gas prices were racing toward $5 a gallon, angering Americans, alarming central bankers and threatening the entire economy.įlash forward 12 months: The national average currently stands at $3.54 a gallon, according to AAA. Filling up at the pump might not be cheap.
0 Comments
Leave a Reply. |