Gas prices are falling thanks to the warm weather this winter
Phil Flynn, senior market analyst, author and FOX Business contributor, joined FOX Weather Sunday morning to explain how warmer weather this winter has led to lower gas prices.
Analysts at GasBuddy and the U.S. Energy Information Administration expect fuel prices to continue to decline throughout 2024, with consumers paying the lowest price per gallon since 2021.
According to GasBuddy's annual fuel price forecast, the average cost will fall from $3.51 per gallon in 2023 to $3.38 in 2024.
The combination of rising US production and rising inventories appears to be playing a role in lower costs, but the technology company warns there are significant potential risks that could alter price cuts.
Geopolitical and weather events such as a historic Arctic blast or hurricane can significantly impact fuel production and distribution.
Even a ransomware attack in 2021 that shut down a major pipeline caused prices to soar as Americans panicked when vulnerabilities in the infrastructure became apparent.
“The global refining picture continues to improve, providing more energy and peace of mind that record prices will stay off the pump in 2024. I expect we will still experience some volatility, unexpected outages and disruptions, and possibly weather extremes.” Related issues, but I do not expect this to lead to record prices. Offsetting OPEC+ production cuts is contributing to rising US oil production, which now stands at record levels. Combined with Canada, North American oil production could further stabilize countries that have decided to curb oil production,” Patrick de Haan, head of petroleum analysis at GasBuddy, said in a statement.
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Although forecasts are that the annual decline could range between $0.10 and $20 per gallon, ups and downs are expected, especially during peak travel periods.
GasBuddy expects Memorial Day to see the biggest rise in fuel prices, with the national average rising to about $3.56 to $4.04 per gallon.
The Consumer Energy Alliance says refineries typically switch to a summer blend of gasoline during the spring, which could slow production and increase costs for customers.
Analysts suggested that some communities along the West Coast could briefly reach the $6 mark during busy travel periods, with larger cities elsewhere in the country hitting $4 caps during late spring or early summer.
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The decrease in cost means that consumers are expected to spend about $200 per month on vehicle fuel in 2024, which represents a decline of more than 12% from the record levels recorded in 2022.
“As 2023 fades, I hope the $5 and $6 gasoline and diesel prices will fade into memory as well,” De Haan said.
Late last year, the U.S. Energy Information Administration said it expected natural gas bills to also decline by more than 20% due to the effects of a warm winter and increased supplies.
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The electric vehicle market is booming as more and more manufacturers get into the electric vehicle craze. Brian Moody, executive editor of Kelley Blue Book, joined FOX Weather on Sunday to explain why electric vehicle manufacturers lowering their prices would benefit consumers.
