With Saudi Arabia’s recently announced extension on its oil production cuts, gas price predictions in the U.S. are all over the place. According to one recent analyst, gas prices could climb by more than $1 sooner than you may expect.
Indeed, GasBuddy’s Patric DeHaan, head of petroleum analysis, believes the Environment Protection Agency (EPA) may need to step in to issue fuel waivers as fuel costs spike across numerous southern and midwestern states, including Oklahoma, Missouri, Montana and more.
“ALERT: #GasPrices will likely rise 25-75c/gal in OK, MO, SD, ND, NE, MN and KS over the next few days. Some stations may go up closer to $1/gal as the wholesale price of gasoline is spiking in this region. EPA should move to issue fuel waivers ASAP,” DeHaan posted to X, formerly Twitter, Thursday.
Indeed, the average cost of gas has already exceeded $3.80 a gallon, the highest seasonal level in more than 10 years. If you recall, this time last year the average was at $3.764 a gallon. Should prices surge in some areas, as DeHaan predicts, prices may get out of hand quicker than some expect.
As it stands, the inventory of gasoline is about 5% lower than the five-year average for this time of year. Just last week the national gasoline supply dropped by more than 5 million barrels.
Interestingly, the U.S. isn’t alone in its gas woes. U.K. gas and diesel prices hit a 23-year peak after crude oil rallied.
Gas Price Predictions
Depending on who you ask, gas prices could hit anywhere from $3 a gallon to $6 depending on weather conditions, developments in the war in Ukraine, or further artificial oil production shortages.
That said, at least one major institution is relatively optimistic that gas prices remain low. The U.S. Energy Information Administration foresees gas prices easing down to $3.09 per gallon in 2024, even below its prediction of $3.32 in 2023.
Meanwhile, algorithm-based price forecasting service Wallet Investor sees gasoline at $3.67 per gallon by December 2025.
Finally, Trading Economics forecasts that gasoline will hit $1.14 per liter in Q2 of 2024. Converting to gallons, this equals about $4.30 a gallon. Ouch.
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.