Will higher gas prices have Americans singing the blues this holiday season and into 2022?December 1, 20212 min read
As Americans gear up for the upcoming holiday season and ready for the New Year, they will encounter somewhat higher fuel prices, affecting everything from air or automobile travel to heating their homes.
According to AAA, current gasoline prices are higher than average across the country and the highest since 2014. The average cost for a gallon of regular gasoline in the U.S. is now $3.39, down one penny from last week. Natural gas, which is the primary heating fuel for about half of U.S. homes, will cost about 30% more than last year, according to a winter forecast by the U.S. Energy Information Administration.
Tulane University energy expert Eric Smith is available to speak about the reasons behind the current fuel crises, the immediate future of fuel costs and offer insight into when customers may see relief from rising gas and natural gas prices. For interviews, contact firstname.lastname@example.org or Roger Dunaway at email@example.com or 504-452-2906.
“Gasoline prices correlate highly with the underlying costs of crude oil, which did see a significant drop over the Thanksgiving holiday weekend. However, the decline was from highs that hadn’t been seen in years,” said Smith, associate director of the Tulane Energy Institute at Tulane’s A. B. Freeman School of Business. In early 2022, we will be at the height of the winter season, with reduced demand for transportation fuel but a high demand for heating fuels.
Smith thinks consumers should be prepared for higher prices at the pump for the next few months.
“The underlying fundamentals of a world rapidly emerging from the COVID-19-induced slowdown, coupled with announced federal policy changes designed to slow down the financing, and hence growth, of new oil and gas production, remain intact. Conventional wisdom is that increasing the cost of hydrocarbons, through new restrictions and increased taxes, is not the way to reduce their ultimate selling prices.
“As a result, the short-term crude oil price trend remains up. We expect that the resulting gasoline prices will be volatile but will continue to increase between now and mid-2022, after which they will stabilize and then decline.”
Eric Smith Associate Director of the Tulane Energy Institute, Professor of Practice
Professor Eric Smith is an expert in energy markets and the oil and gas industry.