The Fill-Er-Up Forecast
The average price per unleaded gallon of gas has now dropped to $3.329, down from an average of $3.343 per gallon this time last year, according to AAA. On top of that, GasBuddy, a company that tracks fuel prices, predicts that gas prices will continue to decline and could even fall below $3 by Christmas.
This news comes at the perfect time, as many Americans gear up for a holiday season that could involve plenty of driving.
Behind the Prices
The global gas market is a complex web influenced by thousands of different factors. It’s difficult to know exactly why prices are on the decline, even while OPEC+ production cuts and the war in Ukraine suggest they should be trending in the opposite direction.
One reason gas prices could be declining is due to the fact that oil refineries are working overtime to make up for a diesel fuel shortage. Right now, there’s increased output, but no place to store it long-term. A surplus of supply tends to result in declining prices for consumers.
That said, industry experts have noted that the decline of gas prices could quickly reverse if China eases its COVID-19 restrictions. The reopening of the world’s second largest economy would drive a sharp increase in demand for oil and other natural resources, which would increase prices.
Considering that gas prices hit $5.01 last summer, the news of $3 gas on the horizon is a breath of fresh air for many Americans. Families across the country can let out a collective sigh of relief that at least one of their monthly expenses appears to be decreasing.
On top of that, the decline in gas prices may impact other inflated expenses as well. For example, cheaper gas prices could also make it less expensive to heat your home or fly across the country.
No one wants coal in their stocking, but if other fossil fuels were on your wish list, it looks like Christmas came early this year.
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