January 31, 2023

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Gasbody says gas prices could rise to $4 a gallon as early as May 2023

After a year of high inflation and market volatility, Gas prices are expected to drop In 2023, though, summer travel could still push prices into the $4-a-gallon range at the earliest, according to new projections.

The GasBuddy app, which provides real-time gas price information, released a forecast for 2023 on Wednesday indicating Americans should do so. Expect some pump relief At the beginning of next year. The annual national average price is expected to drop nearly 50 cents per gallon from 2022 to 3.49 cents, according to the report.

Fuel prices hit record highs in 2022 The ongoing effects of COVID-19 policies That shut down crude oil refineries – limiting oil production – and disruptions in international trade linked to Russia’s invasion of Ukraine. As the world emerges from the pandemic, global refining capacity is expected to increase, which will mitigate the decline in US supplies of gasoline, diesel and jet fuel, according to GasBuddy.

Gas is expected to hover around an average low of $3 a gallon in January and February, when demand is seasonally low. However, as we move into spring and summer, prices may go up to $4 When drivers hit the roads And enjoy the nice weather. By the end of the year, prices should drop again as that demand subsides.

AAA says US national gas prices are now lower than they were a year ago

“2023 isn’t going to be a cakewalk for motorists. It could be expensive. The national average could top $4 a gallon as early as May — and that’s something that could continue through most of the summer driving season,” said Patrick D. Haan. Head of Petroleum Analysis for GasBuddy.

“Basically, curveballs are coming from every direction. Extreme amounts of volatility are still possible, but it should get a lot quieter next year,” he added. “I don’t think we’ve seen as much volatility as we did this year, and that will be a trend that will likely continue to increase uncertainty around fuel prices into 2023.”

Countries are trying to help Americans cope with rising energy costs

Projections indicate that most major US cities will see prices rise to a ceiling of around $4 per gallon, however California cities San Francisco and Los Angeles could repeat their record highs of $7 a gallon in the summer of 2023 if refineries struggle to produce fuel under the state’s onerous regulatory regime.

Overall, it is estimated that Americans will spend $470.8 billion on gasoline next year, down $55 billion from 2022. GasBuddy estimates that the average household will spend about $2,471 on gas in 2023, saving $277 compared to this year.

Christmas gas prices are expected to be around $3

Vehicles pass the Phillips 66 Los Angeles Refinery Wilmington plant on November 28, 2022 in Wilmington, California.

Vehicles pass the Phillips 66 Los Angeles Refinery Wilmington plant on November 28, 2022 in Wilmington, California. (Mario Tama/Getty Images/Getty Images)

GasBuddy’s forecasts reflect the EIA’s expectations Retail petrol prices average $3.51 per gallon in 2023. The company has a poor track record of forecasting fuel prices, with a margin of error of just 0.8% in 2022 after revising its forecasts in the aftermath of Russia’s invasion of Ukraine.

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Looking ahead, GasBuddy expects markets to cool next year, although the 2023 outlook acknowledges that economic recession, unexpected and unscheduled hitches facing U.S. refineries, and natural disasters caused by extreme weather events could affect retail fuel prices.

“What we saw in 2022 was just a frenzy at the fuel pumps in the country, with records seemingly left and right as COVID imbalances continue and Russia invades Ukraine,” De Haan said. “While it is extremely unlikely that lightning will strike the same place twice, storm clouds over the oil and refined markets may persist, and some rally could still occur as the market remains somewhat tight.”

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