American motorists have seen some worrying signs in recent days in the form of rising gasoline prices following more than three months of falling prices at the pump. The good news, however, is that the recent increase could be short-lived.
The national average price for a gallon of gas is $3.725 as of Sept. 26, according to AAA. That’s up from $3.714 the previous day and $3.677 a week prior. The recent uptick ended a run of nearly 100 straight days of falling gas prices during the summer driving season, Fox News reported.
Exactly why gas prices have been ticking higher is unclear, considering that oil prices sank about 5% to an eight-month low on Sept. 23 amid fears that rising interest rates will lead to a global recession. Gas prices are closely tied to the price of oil.
One reason gas prices might have gone up is the fear that hurricane season will disrupt the production and supply of oil and gas. Another factor is the market’s usual volatility, which means the current rise in gas prices might not last long.
“I don’t think you’ll see a major move higher or lower,” Tom Kloza, global head of energy analysis for OPIS, told CNN in an interview on Sept. 21.
Prices could ease over the short term due to seasonal factors such as the end of the summer driving season and the yearly end of government regulations requiring a cleaner, more expensive blend of gasoline.
As CNN reported, wholesale gasoline futures point to sharply lower gas prices by the end of 2022 — including the possibility that much of the country might see prices dip below $3 a gallon.
But other factors could push gas prices higher in coming months. A continued decline in crude prices might push the Organization of Petroleum Exporting Countries (OPEC) to reduce its production. The market could be roiled further by the upcoming European Union ban on Russian oil — two developments that could push oil prices back up again.
Although crude prices fell below $80 a barrel on Sept. 23, analysts at both JPMorgan Chase and Goldman Sachs Group forecast that prices will move back above $100 a barrel during the final quarter of 2022.
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