Gas prices have been on the decline for the past three months after oil supplies rebounded and demand cooled. But that decline has slowed, leaving analysts and consumers anxious over what could happen next for prices at the pump.
There’s still major uncertainty around how gas prices will trend in the near future.
The U.S. has sent record liquefied natural gas exports to Europe to help it boost supplies before winter. But now, as prices climb, the U.S. finds its stockpiles low.
David Rewcastle, equity and fixed-income analyst from Darien, Connecticut, shared his opinion with USA Today.
“If we had the Marcellus pipeline to Pennsylvania, this wouldn’t be an issue,” said Rewcastle, University of New Haven analyst and economics professor. A pipeline between the lush natural gas Marcellus shale and New England was blocked by former New York Gov. Andrew Cuomo.
Why are US gas prices rising?
This year, gas prices rose because of high crude oil demand and low supply. The Federal Reserve has increased interest rates five times in 2022 and is planning to increase them again in the near future in order to lower prices. However, there are other factors that play an international.
Americans are being crushed by inflation. With no relief in the near term, High gas prices are likely to continue to plague consumers.
At the time of this article, the average price of gas in the U.S. is $3.87 per gallon, down $0.02 from yesterday, down $0.05 from last week, and up $0.19 from last month.
Americans have been struggling with high gas prices for years. The drop in prices of gasoline is a welcome relief. Higher gas prices have been caused by a number of factors, including a rebound in gasoline demand after Covid lockdowns and lower supplies. There are also sanctions against Russian gas imports around the world.
Oil CEOs have criticized the government’s efforts to reduce incentives for oil companies to produce more crude oil. The government has also called for windfall taxes and an end to fossil fuels in the coming years.
“We will be paying for it,” David Rewcastle, a University of New Haven analyst and economics professor noted there was no short-term solution before the winter.
“Maybe this will be a teachable moment.” David Rewcastle added.
While gas prices may be falling, they remain high. The average price of a gallon of gas one year ago today was $3.33.
Analysts say that despite exporting less fuel to Europe and other nations, this won’t help as global energy markets mean that there will be more demand for it.
Analysts predict that slowing down exports to oil- and gas-rich regions will lead to higher prices.
Experts have stated instead that the administration must address supply.
The factors that are driving up prices include demand and supply after a particularly cold winter in Europe, pressure on supplies, and Russia’s invasion of Ukraine.
As it attempts to limit the political fallout from rising fuel costs, the White House intensifies its pressure campaign against the oil sector over rebounding gas prices.
In recent weeks, top Biden administration officials have warned companies about inflating prices. Their message was even clearer in private. According to those familiar with the discussions, they have made complaints to executives about their ballooning profits. They also threatened to impose new restrictions on fuel exports if the industry doesn’t help lower the pump price.
President Biden’s team is boosting rhetoric and introducing new regulations. Analysts say this is largely it’s largely scapegoating.
The administration will likely authorize the release of more oil from its Strategic Petroleum Reserve, continuing a long-standing pattern that aims to prevent further price rises.
The efforts of the administration to keep pump prices low highlight how closely gas and political fortunes are intertwined. These actions also illustrate how limited the policy options are for the occupant inside the White House.
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