Will the pain at the pump ever end? Gas could surge back above $4 per gallon by May and remain high through the summer, GasBuddy analyst predicts
- GasBuddy’s Patrick De Haan issued his forecast for 2023 gas prices on Tuesday.
- He says the national average could rise back above $4 as soon as May.
- Gas now stands at $3.10 per gallon, after hitting a record $5 over the summer.
- De Haan believes summer demand could push prices back up again.
There could be more pain at the pump in store for US motorists next year, after gasoline prices backed off from the records set last summer.
‘2023 is not going to be a cakewalk for motorists. It could be expensive,’ Patrick De Haan, head of petroleum analysis at GasBuddy, told CNN on tuesday.
‘The national average could breach $4 a gallon as early as May – and that’s something that could last through much of the summer driving season,’ he added.
After topping $5 in June for the first time in history, national average gas prices have retreated significantly, dipping below $3 on Friday for the first time in nearly 20 months, according to GasBuddy.
Soaring gas prices proved to be an economic bane in 2022, exacerbating painful inflation and raising recession fears, issues that weighed heavily on President Joe Biden’s approval ratings.
After topping $5 in June for the first time in history, national average gas prices have retreated significantly. But one expert believes they will rise again to $4 in May.
Patrick De Haan, head of petroleum analysis at GasBuddy, issued his forecast on Tuesday.
On Tuesday, the US national average price for regular gasoline stood at $3.10, according to AAA.
GasBuddy projects prices will rise to a range of $3.52 to $4.05 in May, as the summer driving season starts up and demand increases.
Gas prices typically rise in the summer, as more Americans hit the road, and refiners switch over to a more expensive summer formulation intended to decrease air pollution.
Still, GasBuddy doesn’t project a return to $5-per-gallon gas next year.
De Haan told CNN that he expects prices to top out at as high as $4.25 a gallon in August before dropping back toward $3 a gallon by the end of the year.
The federal Energy Information Administration has issued similar projections, seeing gas prices averaging $3.51 over the course of 2023, down from the $3.99 average across 2022.
Gas prices rise and fall primarily based on the international price of crude oil. For every $10 increase in the price of a barrel of oil, a gallon of gas rises about 20 cents.
State average prices for gasoline are seen above as of December 27
Oil prices soared in 2022 after Russia’s invasion of Ukraine in February, which prompted bans on Russian oil exports. OPEC also cut back on production despite entreaties from the Biden administration.
US production has also failed to return to the record levels reached prior to the COVID-19 pandemic, which shuttered many marginal producers amid plunging demand.
Starting in March, Biden withdrew 180 million barrels from the Strategic Petroleum Reserve, bringing the stockpile to its lowest level since the 1980s.
The reserve was created after the 1970s Arab oil embargo to give the United States a supply that could be used in an emergency.
Tapping the reserve is among the few things a president can do by himself to try to control inflation that often creates a political liability for the party in control of the White House.
A Chevron and Shell gas station posts prices for gasoline on December 12 in Miami. After topping $5 in June for the first time in history, national average gas prices have retreated.
The Biden administration said earlier this month that it would begin buying 3 million barrels of oil to begin replenishing the strategic reserves.
The Energy Department called the purchase ‘a good deal for American taxpayers’ since the price would be lower than the $96 per barrel average the reserve oil was sold for over 2022.
The replenishment will also strengthen US energy security, the department said in a statement.
The purchase price was not announced, but benchmark West Texas Intermediate crude oil was selling at $74.50 per barrel at the time of the announcement.