Gasoline Price Predictions: Falling Trends Expected to Continue in 2023
Factors Contributing to the Decline in Gasoline Prices
According to the source, Gasoline price predictions in the United States show a current downward trend, despite a recent 5% increase in US crude oil futures due to the Israel-Hamas conflict. The national average retail gasoline price, a key factor in gasoline price predictions, stands at $3.58 per gallon, which is $0.10 lower than a week ago and $0.30 lower than a month ago. Even California, known for its high gas prices, has seen a $0.17 decrease in the past week, with an average of $5.59 per gallon.
Andrew Gross, a spokesperson for AAA, explained that this decline aligns with the predictions based on the seasonal fall in gas prices and it’s expected to continue throughout 2023. Gasoline price predictions are influenced by factors like the switch to a less expensive winter blend of driving fuel and lower seasonal demand. However, a potential factor that could change gasoline price predictions would be if the Israel-Hamas war expands to include oil-producing nations in the region.
Higher inventories, which are about 10% higher than a year ago, are also a significant consideration in price predictions. This year is notably different from the previous one, even with oil prices at similar levels as there has been an increase in refined product supply, affecting gasoline price predictions. As a result, refinery margins are coming down, which contributes to the driving down of gas prices for consumers, as anticipated in gasoline price predictions.
Factors Shaping Future Gasoline Price Trends
Gasoline price predictions suggest that consumers may continue to enjoy lower gas prices in the coming months, with the possibility of another 20 to 25 cents per gallon of downside if crude oil prices remain stable. Weak gasoline demand in the US, which has fallen below 2020 levels in certain weeks, further contributes to the decline in gas prices as per price predictions.
Despite fluctuations in oil prices driven by events like the Israel-Hamas conflict, the crude market remains fundamentally healthy, with supply and demand well-balanced, factors that influence gasoline price predictions. However, concerns about demand destruction could arise if oil prices reach the $90s. Ongoing OPEC+ production cuts and Saudi Arabia’s unilateral reductions are expected to influence oil prices through the end of the year, impacting gasoline price predictions.