Falling Gas Prices Give Americans A Small Break, But How Low Will They Actually Go?

Gas prices fell for the 29th consecutive day on Thursday after reaching a record-high national average of $5.01 per gallon back in mid-June.

The national average price of gas dropped to $4.605 per gallon on Thursday, according to the American Automobile Association. But the relief at the pump may be short-lived for American drivers as experts say there is no guarantee that gas prices will continue to trend downward.

Patrick De Haan, GasBuddy’s head of petroleum analysis, told the Miami Herald, “Will this stick around? I guess that’s anyone’s best guess given the amount of volatility in the market. There’s no guarantees.”

Volatility in the oil market is driving concerns even as oil prices have dropped below $100 a barrel for the first time since April. As of Thursday morning, crude oil was trading at $95 a barrel, OilPrice.com reported.

Citibank is predicting that oil prices could reach as low as $65 a barrel by the end of 2022 and decline to $45 a barrel by the end of 2023, if a recession occurs, Bloomberg reported.

“If oil falls below $100 and stays there, we could see gas prices coming closer and closer to $4 (a gallon),” Mark Schieldrop of AAA Northeast told the Boston Herald.

Some analysts are convinced that gas prices could rise again, with JPMorgan saying it sees “stratospheric” oil prices reaching $380 a barrel, Bloomberg said.

“The one underlying common denominator here is that volatility could lead us to drastically different outcomes,” De Haan told the Miami Herald.

Gas prices have fallen significantly in the states of Texas, Ohio, Illinois, California, Wisconsin, Indiana, Kentucky, Alabama, Virginia, and Florida, while South Carolina, Georgia, and Mississippi have the lowest gas prices in the country, AAA said.

The price at the pump rose sharply in the first half of 2022 amid record inflation, the Russia-Ukraine war, and high demand during the peak summer travel season.

Other factors could also influence the price of gas going forward, including the weather as hurricane season has the potential to disrupt oil production. U.S. policy changes, inflation data, and the latest earnings reports from some of the world’s largest oil companies also could cause gas prices to increase once again, De Haan said.