Gas Prices To Drop For The Holidays

The U.S. Energy Information Administration said Tuesday the national average for regular gasoline will probably drop to $3.01 a gallon in January. For 2022, gas prices are expected to average $2.88. That call is based on projections by the EIA for global oil production to increase more quickly than demand next year, especially given the emergence of the Omicron variant, which heightens unknowns about the level of energy consumption around the world in the near future. Our forecasts for petroleum and other energy prices, consumption, and production could change significantly as we learn more about how responses to the Omicron variant could affect oil demand and the broader economy,” EIA Acting Administrator Steve Nalley said. 

Presidents, generally speaking, have little control over the price of gasoline, but that doesn’t stop them taking the blame when prices are high. Biden has seen his approval rating hover at around 43 percent in recent polling. In recent weeks, the administration has made moves to try to bring the price down, including by calling on other countries to increase their oil production and tapping into its crude oil reserves. 

And administration officials have indicated that they were looking at multiple “tools” to lower gasoline prices, while several Democrats have floated the idea of banning crude oil exports to increase domestic supply. Republicans have seized on the high gasoline prices to attack Biden, and an analysis from left-wing think tank Data for Progress showed a strong correlation between Biden’s disapproval rating and gasoline prices.

Natural gas has been driven lower in part by the fact that temperatures across the United States have been warmer than usual. That has eased demand for natural gas, the most common way to heat homes.

“The warmer-than-normal start to winter has alleviated concerns,” said Christopher Louney, vice president of global commodity strategy at RBC Capital Markets. Of course, it’s too early for the all-clear signal on the home heating front. Winter hasn’t even officially begun yet and very cold temperatures in the coming weeks and months could spark a rebound in natural gas futures.