Retail gasoline prices could dip below $3 in the coming weeks, but that could be the short-term floor. File Photo by John Angelillo/UPI | License Photo
Dec. 19 (UPI) -- The retail price for gasoline continues to decline and is nearly $2 gallon below this year's peak, but don't expect the trend to go on for long, a market analyst said.
Travel club AAA reported a national average retail price of $3.14 per gallon for Monday, about 12 cents lower than a week ago, 54 cents cheaper than this time last month and 16 cents less than a year ago.
Retail gasoline prices hit an all-time high for the year at $5.02 per gallon in June, when crude oil prices were well above $100 per barrel. The price for Brent crude oil, the global benchmark for the price of oil, was closer to $80 per barrel on Monday.
The price of crude oil accounts for the bulk of what consumers see at the pump. Patrick DeHaan, the senior petroleum analyst at price-watcher GasBuddy, said from Chicago that market momentum should take the national average below $3 per gallon in the next week or so, but "it is soon likely to fade as oil prices have held in the $70 per barrel range" for much of the month.
Brent prices increased in response to the relaxation of strict COVID-19 policies in China, though concerns about a possible global recession have limited recent gains. An early 2023 move by the European Union to stop taking in refined petroleum products from Russia could push crude oil prices higher, bringing gasoline prices with them.
Demand, however, will continue to be a factor over the short term. Travel during the upcoming Christmas holiday could be limited due to forecasts for a major winter storm west of the Rockies. Some states in the Midwest saw over a foot of snow fall during the weekend and any further inclement weather would dent demand and keep a lid on gasoline prices.
At least a dozen or so states are posting an average price below $3, with Texas setting the low bar for the nation at $2.62 per gallon.
The latest forecast from the U.S. Energy Department puts gasoline prices at $3.99 on average for 2022 and $3.51 for full-year 2023.