The conflict between Israel and Iran, Ukrainian drone attacks on Russian oil refineries, and OPEC’s actions to hold back oil supply have all raised concerns about rising gas prices in the US. However, despite these developments, gas prices have stabilized and even decreased slightly in recent days. The national average for gas stands at $3.66 a gallon, down from $3.68 a week ago. Experts like Patrick De Haan and Tom Kloza predict that gas prices may have already hit their peak for the spring and possibly for the entire year, providing relief for drivers in the coming weeks.
Although gas prices are not as low as they were during the height of the Covid-19 pandemic in 2020, a springtime peak below $3.70 a gallon would be considered a win for consumers. Currently, only seven US states are experiencing gas prices of $4 or more per gallon, with California leading at $5.40 per gallon. This year’s gas prices are not expected to reach the unprecedented spike above $5 a gallon seen in June 2022, providing a sense of normalcy for consumers when filling up their tanks.
The stabilization of gas prices comes as a relief for officials in Washington, particularly President Joe Biden, who is facing low approval ratings for the economy and inflation. Rising gas prices earlier in the year contributed to worse-than-expected inflation readings, which have raised concerns about when the Federal Reserve will be able to lower interest rates. Biden’s administration has backed off plans to buy crude oil for the US Strategic Petroleum Reserve, indicating their concern about the impact of gas prices on the economy.
Despite the current stabilization of gas prices, some analysts predict that prices may still increase slightly. Andy Lipow expects the national average to peak at $3.75 a gallon this year, which is lower than last year’s peak of $3.88 a gallon. Oil prices have also stabilized after fears of a wider conflict in the Middle East eased. Seasonal factors such as the switch to summer-grade gasoline and increased production from US refineries are also contributing to the stabilization of gas prices.
There is a risk of a double peak in gas prices, as seen last year when prices cooled off in the spring and then rose again in the late summer due to extreme heat impacting refineries. Weather events such as severe hurricanes could also disrupt oil refineries in the US Gulf Coast, posing a potential risk to gas prices. Forecasters are predicting a busy hurricane season, which could impact the supply and prices of gas in the coming months. Overall, while gas prices have stabilized for now, there are still potential risks that could lead to fluctuations in the future.
