Posted on 12/28/21
| News Source: Newsmax
Gas prices could exceed a $4 average before the summer, GasBuddy.com predicted.
The GasBuddy forecast projects gas prices will peak nationally at an average of $3.79 in May, before retreating below current levels by late 2022, CNN reported.
"We could see a national average that flirts with, or in a worst-case scenario, potentially exceeds $4 a gallon," Patrick De Haan, head of petroleum analysis at GasBuddy, told CNN.
GasBuddy's forecast also predicts the national gas price average will rise to $3.41 per gallon next year, up from $3.02 in 2021.
The predicted rise in gas prices would magnify inflationary pressures hitting U.S. families. Consumer prices rose 5.7% over the past year, the fastest pace in 39 years.
GasBuddy based its forecast on several major factors, including demand that continues to recover from COVID-19 much faster than supply.
"The economy is hot. Demand has come roaring back. But supply is still catching up after getting cut greatly in 2020," De Haan said, CNN reported.
OPEC and its allies implemented unprecedented production cuts in the spring of 2020 after oil prices crashed below zero for the first time ever, CNN reported. U.S. oil companies also cut production.
Another factor in gas prices is that key refineries have been sidelined in recent years. Low prices when the pandemic began forced closures of locations that produce gasoline, jet fuel, and diesel fuel.