Patrick De Haan, head of oil analysis at GasBuddy, warned Thursday that gas prices in 2022 will be “in the foreground”, noting that the highest gas prices “will be in the first half of the year. ‘year”.
GasBuddy’s fuel projections indicate that a national average of $ 4 per gallon is a real possibility for 2022.
De Haan told “Varney & Co”. Thursday that California could experience a state average price of more than $ 5 for gas.
The Fuel Economy Platform predicts a national average of $ 4 per gallon is possible by spring due to the pandemic recovery and increased demand before aid or supply in additional oil does not arrive later in 2022.
De Haan said he believed prices would drop at the end of the year, but warned that at the end of 2022, prices “may not go below $ 3.”
On Thursday, the national average for gasoline was $ 3.29, down 11 cents from the previous month and $ 1.03 more than the same period last year, according to AAA.
The association noted in a press release that the recent steady decline in gas prices slowed due to a fire at a large oil refinery last week. Four people were injured last Thursday when a fire broke out at Exxon Mobil Corp’s refinery in Baytown, Texas, which is one of the largest refinery and petrochemical facilities in the country.
Still, oil traded around $ 76 a barrel on Thursday, and De Haan warned that the price of oil “continues to rise.”
“Omicron is less severe than expected and that will likely drive demand further in 2022,” he said.
He noted that in the future, the “problem” will be refining capacity and that it cannot be resolved quickly.
“Refineries have modernized in recent years, but the economic situation is not improving,” De Haan said. “With the clear abandonment of the administration of fossil fuels, you wonder if there will be a lot of investment in the United States in refining capacity. ”
“I think most of the refining capacity that we see added will probably be in the Middle East or Asia in the coming years, so this is an issue that in the spring could drive gas prices. hitting the $ 4 mark, “he continued.
WHAT THE OIL MARKET IS REPORTING ABOUT OMICRON
President Biden revoked the Keystone XL pipeline project’s license on his first day in office in a series of ordinances aimed at tackling climate change, ending a project that was expected to employ more than 11,000 Americans this time. year.
Biden also temporarily suspended the issuance of oil and gas licenses on federal lands and waters.
“The average household this year [is] will spend almost $ 2,400 on gasoline, ”De Haan said Thursday, noting that the price“ has not been so high since 2014 ”.
“The rise in gas prices should persist this year,” he said.
De Haan provided insight as consumer prices rose at the fastest rate in nearly four decades in November, with Americans paying more for virtually everything from groceries to cars to gasoline.
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The consumer price index rose 6.8% in November from a year ago, according to a report from the Ministry of Labor, marking the fastest rise since June 1982, when inflation hit 7.1%. The CPI – which measures a multitude of products ranging from gasoline and health care to groceries and rents – jumped 0.8% in the one-month period from October.
Price increases were widespread, with energy prices jumping 3.5% in November, up 33.3% year over year. Gasoline is an astonishing 58.1% higher than it was a year ago.
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Bradford Betz and Megan Henney of FOX Business contributed to this report