Gasoline Price Predictions
With inflation jumping and supply chain woes far from over, and wars in Eastern Europe, the forecast for gasoline prices has to be up and up. You might be very happy to own an EV.
The key to the coming big price increases is that oil companies will use all their spare capacity, and gas refineries will max out. It’s a crisis even without another hurricane hitting the gulf states. Although only 57% of gas price arises from oil, oil prices are forecast to rise much higher.
Pipelines, refining and transportation add to the price. With limited refinery capacity, shut down pipelines, and higher transport costs, and truckers off the job, it’s not hard to see a big mess ahead.
Given how volatile all the markets are right, who can confidently provide reliable forecast? Well, if we take a simple approach and seek the predictions of some oil and energy industry experts, we might get a good idea. However, their forecasts for oil are between $65 to $200. And almost none of them will touch the topic of gasoline price predictions.
If you live in the US and you’re outraged at gas prices, consider the plight of Canadian gas buyers who pay an equivalent of $4.60 per gallon in US dollars. And remember that Canadian wages are much lower and winter is colder. And in some part of northern Europe, they pay almost 3 times US gasoline prices.
So the whole world is hurting after international political efforts made against oil drilling. What goes around is coming back to bite as it should, in ultra high gasoline prices.
Today’s Average Gas Price: $3.48 a Gallon
As of today, February 11, 2020 the average gasoline price across the USA is $US 3.480 per gallon. Checking in with AAA on the gas prices across each state (gasprices.aaa.com/state-gas-price-averages/) is appropriate given the summer auto driving season could be the most brisk one yet. With air flights hard to come by and overpriced, Americans and Canadians will be driving this year, likely to more distant vacation spots. That means even more gas consumption than normal.
Does anyone still use premium grade gasoline? Apparently so, and that must be painful.
EIA, the US Energy department reports that consumption will rise, yet has posted oil price predictions of $65 to $80 a Barrel. They forecast a small increase on average of about 24 cents a gallon in gas prices. Yet, the squeeze on oil and refinery output likely means a prediciton of $5.00 a gallon on average is realistic sometime during 2022/2023.
As the gas history price chart shows, they predict prices will fall into next year. Wow, that is a bold outlook. The only way that could happen would be through an economic shock and recession. While a stock market crash and housing market crash are a real possibility, the economy is strong and not likely to plunge. We’ll see what transpires with the Russians.
Oil production is climbing but is not expected to keep up with demand. Already, OPEC+ is struggling to keep up production. And any unusual event, such as a war, would provide a significant disruption creating an emergency situation.