"US Gasoline Prices Could Soar to $4 by Next Year"

GasBuddy, Ongoing Concerns Over Supply Shortage Amid Demand
US Government Predicts Oil Price Drop, But Strong Prices Expected

[Image source=AP Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] In downtown Los Angeles or New York, gas stations still easily sell gasoline at the high end of $4 per gallon. There is a forecast that this situation could occur nationwide in the United States next year. Amid expectations that the impact of the Omicron variant will not be significant, international oil prices are also on the rise again.

According to CNN on the 28th (local time), the oil price information company 'Gas Buddy' forecasted that the national average gasoline price in the U.S. will rise from $3.02 per gallon this year to $3.41 per gallon next year.

Gas Buddy expects gasoline prices to rise to a national average of $3.79 per gallon by Memorial Day in May next year, when the summer vacation season begins, and then fall below the current level in the second half of next year. In the worst case, the possibility of surpassing $4 per gallon is not ruled out.

According to the American Automobile Association (AAA), the current average gasoline price in the U.S. is $3.29 per gallon. It has dropped about 13 cents from the peak of $3.42 on November 8. Despite international oil prices falling about 20% from their peak, gasoline prices have not declined as sharply as the U.S. government expected.

CNN expressed concern that the recent decline in international oil prices due to the Omicron variant might eliminate expectations of a drop in retail gasoline prices.

Gas Buddy estimated that due to the continued economic boom after the COVID-19 pandemic, demand is recovering faster than supply, and oil prices are likely to continue rising.

Although demand has increased, the reduction in oil supply is also a factor driving up oil prices. OPEC+ and U.S. oil companies are still not producing crude oil at pre-COVID-19 levels.

OPEC+ oil-producing countries are scheduled to hold a regular meeting on the 4th of next month to discuss whether to reduce production cuts, but analysis suggests that the possibility of increasing production this time is low. Despite pressure from the U.S. to increase production, oil-producing countries are not expanding output.

Patrick De Haan, head of Gas Buddy, pointed out that prices will rise further due to the closure of several refineries, saying, "There is little room to breathe due to refinery closures."

Gas Buddy's forecast contrasts with that of the U.S. Energy Information Administration (EIA), which recently expected the national average gasoline price to fall to $3.01 per gallon in January next year and drop to $2.88 next year.

International oil prices are also rebounding, reflecting expectations of increased demand.

On this day, the price of February West Texas Intermediate (WTI) crude oil closed at $75.98 per barrel, up $0.41 (0.5%). WTI prices have risen for five consecutive trading days.

This content was produced with the assistance of AI translation services.