Gas Prices Going Up Again?
Gas prices rose for the first time in 98 days, however, experts believe that they will remain relatively stable for at least the next couple of months.
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Americans were finally starting to feel a smidge of relief at the pump. Now that may all go away with the latest news from the AAA. Yesterday gas prices rose again, for the first time in 98 days.
According to a report by CNN, the nearly 100-day streak of falling prices was the second longest in history. The record-holding year was back in 2005. The increase that stopped the current trend of falling gas prices was $.01.
That’s far from the highest jump we’ve seen this year and likely won’t be felt too deeply by most drivers. However, it could indicate an unwelcome trend in the next few months. But in the short term, analysts predict gas prices will remain relatively consistent.
The oil and gas industry has come under heightened scrutiny over the last few years – and from a broader segment of the nation than is typical. Many people who previously had little to no knowledge of how their gas makes it to the pump scrambled to learn more after prices skyrocketed this year. The problem is, with so many factors influencing the price of gas, it is challenging to understand.
Perhaps the largest underlying reason for the most recent drop in gas prices is a decrease in demand. After gas prices steadily climbed at the start of the year, they hit a record high of $5.02/gallon in mid-June. The sheer cost of gas caused people to hit the brakes on their driving habits.
Americans love to drive everywhere – and often. But gas prices became unsustainable for those already hurting by the high cost of groceries. So, more and more people decided to stay off the roads whenever possible.
Additionally, many have become wary of the looming global recession. Fear of potential job loss or saving for an uncertain future took priority. This sharp drop in demand went hand in hand with a significant and unexpected increase in supply.
The Biden administration has released barrels from the Strategic Oil Reserve at unprecedented levels throughout the year. That influx of reserves bolstered the market. And, thanks to gas prices lowering, consumers started driving again.
The return to the road has been great news for the economy. With the US economy seeing record inflation and teetering on the edge of recession, any amount of consumer spending gives the economy some breathing room. The spending has helped stabilize inflationary numbers…slightly.
That doesn’t feel like the best news for consumers, as prices remain high for everything. But it does help ease the pain that higher inflation would cause. However, since fall and winter are around the corner, a jump in inflation is still a risk.
With the end of the summer driving season and the recent news that OPEC will cut production, gas prices could rise again. Experts remain cautious in their predictions. Some are optimistic that the price at the pump will remain stable throughout the year.
Others, such as those behind futures predictions are strictly optimistic. The futures market forecasts gas prices falling below $3/gallon by the end of the year. So, with any luck, those futures predictions will be accurate – just in time for the holiday shopping season.
