Along with the many things people would like to leave in 2021, skyrocketing gas prices are high on the list. Unfortunately, the unrelenting increase does not seem to be slowing down any time soon.
According to the U.S. Energy Information Association, U.S. gasoline prices averaged a whopping $3.99 per gallon in November, a 10 cent per gallon increase from October and a $1.29 per gallon increase higher than November 2020. The November 2021 monthly average was the highest since September 2014. The EIA forecasts that retail gasoline prices will average $3.13 per gallon for December and fall off to $3.01 per gallon in January. They predict an average of $2.88 per gallon on average for all of 2022.
They note the emergence of COVID-19 variant Omicron has raised uncertainty about the level of energy consumption throughout the world compared with recent month’s forecasts. They also point out that there have been several economic forecasts by economic research firms that have increased the outlook for the U.S. economy, but that these reports were all completed in Mid-November before the new variant began ripping through the country. “winter weather along with the evolving effects of consumer behavior on energy demand because of the pandemic present a wide range of potential outcomes for energy consumption” their statement said.
Trading Economics adds that “US gasoline futures rallied past $2.2 per gallon, the highest since Nov. 25, 2021, amid fading concerns about the omicron variant despite news that several airlines canceled thousands of flights due to COVID-related staff shortages” which also put a strain on prices.
So while gas prices are largely expected to come off in the new year, omicron has inevitably thrown a wrench into the timeline. Overall, the consensus is that gasoline prices will decrease as economic output revs back up, but firm forecasts are not possible as long as the Omicron variant continues to threaten economic demand.
For consumers, this means they might have to hang tight just a while longer for an actual reprieve from gas prices that have shown historic highs at the pumps over the last 12 months.
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