Lazaro Aleman, ECB Publishing, Inc.
The good news is that for the first time in 2018, the national average price for a gallon of gasoline declined last week, according to GasBuddy, a consumer information app that provides real-time fuel prices at more than 140,000 gas stations in the U.S., Canada and Australia.
Gas Buddy reported “that the national average price for a gallon of gasoline had declined week-over-week by 3.5 cents per gallon to $2.57 per gallon, while the nation’s average price for diesel had slid back under $3 per gallon to $2.98.”
GasBuddy attributed the drop to various factors, including stock market volatility, falling oil prices, and a government report showing “a trifecta of inventory increases: crude oil, gasoline and distillate inventories all gained, pushing wholesale gasoline prices down and paving the way for gas prices to cool off.”
All of which should spell declining gas prices at the pumps in the weeks ahead, according to Patrick DeHaan, the head of petroleum analysis for GasBuddy.
Before anyone gets too excited about the good news, however, DeHaan warned of still looming gray clouds on the horizon. The respite, in other words, will likely be short-lived, given concerns of rising inflation, seasonally scheduled maintenance work at refineries, and general economic anxiety.
Credited also with contributing to
the upward push on prices are decreasing oil supplies, compliments of the
Organization of Petroleum Exporting Countries (OPEC) keeping a tight lid on output, and declining oil production in Venezuela because of the political instability there.
The main counterbalance to these pressures, of course, is increased U.S. production, with the U.S. again among the world's top energy producers, according to the experts.
“Production is blasting through all kinds of records,’’ USA Today quotes Tom Kloza saying. “We’ve become perhaps the world’s biggest exporter of gasoline.’’
Kloza is identified as head of global energy analysis at market researcher Oil Price Information Service.
Yet notwithstanding the increased U.S. production, experts still see higher prices at the pump up ahead.
"I think $3 a gallon is going to be more widespread, at least temporarily," DeHaan said last week.
Most experts, in fact, foresee higher gas prices overall in 2018, a trend that was more evident in mid January, when the national average for regular unleaded was 24 cents higher than during the same week in 2017. In California, meanwhile, motorists were paying an average of $3.21 a gallon, a 42-cent jump over the previous 12 months. And in Texas, which boasted the cheapest gasoline in the country, the average of $2.32 per gallon was still 21-cents higher than at the same time in the previous year.
These higher prices, however, are nowhere near 2008, when the national average hit a historic high of $4.11 per gallon, according to Forbes Magazine. Still, experts agree that the general trend is upwards, with the prospect of $5 a gallon not completely unthinkable.
“For consumers, the question is how high are gas prices going to go in 2018,” AAA spokesperson Jeanette Casselano is quoted saying.
According to Forbes, domestic crude oil production is partly to blame for the increase, as the Energy Information Administration reportedly dropped by 290,000 barrels during the first week in 2018, “the largest dip since the end of last year’s hurricane season.” Meanwhile, the number of active oil rigs in the U.S. declined during the same period to 747, a drop of five. All the while, demand remains strong, as U.S. motorists continue to migrate from sedans to SUVs, experts say.
Typically, winter is a time when people drive less, demand for fuel drops, and lower prices result, according to USA Today. But not so this winter, with the average price of gas nationwide in January up 24 cents from the same time the previous year.
The upward trend is reportedly already causing some motorists to reconsider their driving habits and the value of fuel-efficient vehicles.
"It definitely makes you think about getting a hybrid or something smaller," one woman is quoted saying. "We definitely wouldn’t buy a truck because gas is so much more."
Kloza estimates that the average family will pay $40 to $50 more for gasoline this year than last year. “And $90 over what they paid in 2016,” he said. “But that’s still $50 to $100 lower than what they paid every year from 2011 to 2014.”
Should gas prices continue to climb, here are some suggestions one expert offers for coping with the increases, which would spread to other market sectors, such as food, travel and daily services.
Switch to a more fuel-efficient vehicle.
Find alternate ways to heat your home, such as natural gas or propane, better insulate your home to make it more energy efficient, or install a wood-burning stove.
Start a garden, it will reduce your grocery bill.
Buy food in bulk.
Learn to preserve food by home canning if necessary.
Walk, take public transportation or ride your bike.