After a year of surging gas prices, the new year may finally bring some relief for Americans. The U.S. Energy and Information Administration (EIA) is projecting a modest decrease in the average gas price for 2022, based on increased crude oil production.
Of course, it could be argued that gas prices have almost nowhere to go but down, after the steep runup in the past year. Pump prices have reached their highest level in seven years, up 58% since November 2020. President Biden finally acknowledged the issue by releasing three days' worth of oil from the Strategic Petroleum Reserves, to minimal impact.
Patrick De Haan, petroleum analyst with GasBuddy, also predicts a modest price decrease in the months ahead. "OPEC is continuing to increase oil production...so I think for Texans, prices may flirt at or just below three dollars per gallon, but through 2022 I think prices may cool off throughout the year," he tells KTRH.
"For the last year, we've continued to see an imbalance growing (in the market), as consumers have taken back to the nation's roads, and demand has outpaced supply," De Haan continues. "As we wear on into 2022, we may see an eventual balancing between oil supply and demand."
While some decline in gas prices is expected, don't plan on a return to the ultra cheap prices of a year ago. "Much of those lower prices were only brought on by the fact that consumers stayed far closer to home, that businesses and schools were closed (due to the pandemic)," says De Haan. "So what we saw last year with low prices is, almost absolutely, not going to be repeated in the year ahead."
"For now, we are stuck with some higher prices that will slowly improve, I expect, as 2022 wears on."
Photo: AFP