Gas costs are on a record-breaking decline. Is this the final week that costs fall?
Gas costs simply hold declining. But the query stays: for a way lengthy?
The week of Sept. 11 marked the 14th consecutive week that the national average gas price declined, in response to a Monday, Sept. 19, weblog publish from GasBuddy. The common is now $3.64, down 3.9 cents from final week and 25.7 cents from this time final month. Prices are nonetheless 45.9 cents larger than this time final yr.
The present streak beats 2018’s file decline and marks the longest downward streak in costs since 2015, Patrick De Haan, head of petroleum evaluation at GasBuddy, stated within the publish.
While costs proceed to fall, specialists are cautious that the almost 100-day streak may come to an finish as quickly as this week.
Here’s what it’s worthwhile to know.
Could gasoline costs rise once more?
The final 14 weeks have been a reprieve from June’s record-breaking value highs. Prices hit their highest level on-record on June 14, when the national average was $5.01, in response to AAA’s knowledge.
But sooner or later, the decline streak has to come back to an finish, even when only for a day. Recently, the scale of the each day value decreases has been slowing, an indication that the tip may very well be close to, Andrew Gross, AAA’s public relations supervisor, advised McClatchy News.
“I’m still thinking this might be the week that the streak ends,” Gross stated. “Last night was about the smallest price decline we’ve seen in a while, but down like 1/10 of a cent. Normally it’s fallen a couple of tenths of a cent to one penny.”
De Haan shared an analogous view, pointing to elements nationwide that might disrupt the worth decline streak and describing the streak’s future as “murky.”
“This week could change the downward trend,” De Haan stated within the Sept. 19 publish. “With some issues arising in Plains and Great Lakes states as the transition to winter gasoline begins, I think we have the best potential to see the weekly trend of falling prices snapped. West Coast states also continue to see increases as unexpected refinery issues continue to percolate, preventing a downward move.”
But what may make gasoline costs rise once more? The future of costs rests on numerous elements, in response to specialists.
Consumer demand presents promising indicators
The demand for gasoline has been unusually flat this yr. High gasoline costs, general inflation and persisting recession fears have pushed adults within the United States to change their driving habits, in response to a July AAA survey.
To put it one other method: People have began driving much less to fight rising costs.
Even as costs have come down, these habits haven’t reverted to the norm, Gross advised McClatchy News.
And we shouldn’t anticipate to see that change anytime quickly, in response to Gross. Gasoline demand traditionally falls throughout the winter months, and the vacations don’t sometimes result in any vital spikes in costs or demand, Gross stated.
“People just generally drive less during the winter months because the days are shorter and darker and the weather’s crummier,” he stated. “We haven’t seen a spike in prices around the holidays. Maybe some localized price increases depending on places where people are going for the holidays. Those places may see some temporary price increases just due to volume demand.”
If demand stays low, costs will probably additionally keep low. But the development may very well be reversed if demand will increase.
Hurricane season will play a job
Hurricane season is formally underway, lasting from June 1 to Nov. 30, in response to the National Oceanic and Atmospheric Administration. Despite early predictions that this yr would see “above-average hurricane activity,” to this point, there has not been vital injury to grease or gasoline manufacturing.
The quiet season is a “big deal” for gasoline manufacturing, in response to Gross. If the development continues, a “really weird hurricane season” may imply good news for shoppers.
“[Hurricanes] have a terrible habit of going right for the oil industry,” Gross stated. “While the refineries themselves might not be damaged, there could be localized flooding or the electrical grid could go down. And that just knocks the plant offline for a while so that could that puts pressure on oil prices, gasoline prices, if the refinery is not working, but we haven’t seen that yet.”
The way forward for gasoline costs
The U.S. Energy Information Administration predicts retail gasoline prices will average $3.60 per gallon within the fourth quarter of 2022. That’s just a few cents decrease than this week’s nationwide common, suggesting that costs will proceed falling by means of the tip of the yr.
The administration forecasts a median of $3.61 per gallon in 2023.
As client demand, provide, climate patterns, the affect of warfare and the pandemic proceed to fluctuate, although, gasoline costs will as nicely.
And these elements have left specialists like Gross unsure of what the longer term holds in relation to gasoline costs.
“We’re kind of getting back to something more normal,” Gross stated. “Since COVID started, everything has been weird. But what is normal anymore? It’s hard to tell.”
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