Gas prices have remained a fixture of water cooler conversation across the country as 16 states enjoy average fuel costs under $3 a gallon. Indeed, the price of U.S. crude is down to just $69 a barrel, the lowest level since June. gas price predictions are all over Wall Street as drivers everywhere wonder just how low gas prices may go this holiday season.
Should oil costs continue to fall, American drivers may enjoy something of a Christmas miracle at the pump. Average gas prices are currently at $3.20 a gallon, its cheapest point since Jan. 3, and below last year’s average price of $3.33.
Reasonably so, countries worldwide, particularly non-members of OPEC+, have been pumping oil at a rapid pace. U.S. data released Wednesday suggests crude inventory may be slipping even as the supply of gasoline continues to climb. Crude inventories fell more than 4 million barrels last week, while gasoline increased by 5.4 million barrels.
Oil prices are down more than 13% year-to-date despite OPEC+’s production cuts, which are set to continue through the first quarter of 2024.
Will Gas Prices Continue to Fall? Gas Price Predictions
Despite the current low cost of oil, conditions may change in 2024. According to the Energy Information Administration (IEA), Brent crude will average about $93 per barrel in 2024, nearly $10 higher than this year. This will affect oil prices, with the retail price of gasoline expected to jump to $3.61 per gallon from $3.55. Interestingly, this is likely partly due to an expected decline in gasoline consumption by about 1%, bringing per capita gas consumption to its lowest level in twenty years.
Meanwhile, algorithm-based forecasting service WalletInvestor sees gas prices climbing to $3.673 per gallon over the next two years.
Plenty of factors remain in the air that may affect fuel costs heading into the new year. This includes weather conditions, the war in Ukraine, and the potential for additional production cuts.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
