Gasoline prices remain stable and have risen only slightly as demand returns.
The national average is $3.26 per gallon, which is down $0.05 from a week ago, but rose by $0.05 from a month ago, said Patrick De Haan, head of petroleum analysis at GasBuddy, the Boston provider of retail fuel pricing information.
The price of diesel is selling for $4.62 a gallon on average, which is a decline of $0.07 a gallon during the pat week.
Demand for gasoline has risen steadily since people have resumed their daily driving habits.
“The holidays will be behind us in next week’s data, and as of right now we’re on track for another rise in demand this week, up 5.8% from Sun-Tue thus far,” he tweeted.
Depending on the amount of gasoline used by consumers, the price of gasoline could remain under $4 a gallon, De Haan said.
“If Americans were to restrain their consumption of gasoline this summer to current levels, we wouldn’t even get to $4 per gallon for a national average,” he wrote.
Crude oil prices have also increased steadily. Prices will continue to rebound this year, according to energy analysts and commodity experts.
The rebound in crude oil prices began after Russia invaded Ukraine on Feb. 24 and OPEC+ countries have maintained their production cuts.
For the past two years, commodities have had a strong run. Oil prices were volatile in 2022 as the global coronavirus pandemic continued.
West Texas Intermediate, the U.S. benchmark for crude oil prices, traded at $57 a barrel in January 2020 and is trading around $78.68 on Jan. 12.
Several experts remain bullish on the energy sector.
WTI is expected to “bounce between $75 and $80 per barrel” during the first quarter since global supplies remain constrained due to OPEC cutbacks and the western embargo on Russian oil, Bernard Weinstein, an energy economist and retired associate director of the Maguire Energy Institute at Southern Methodist University in Dallas, told TheStreet.
The outlook for commodities “looks bright,” said John LaForge, head of global real asset strategy at Wells Fargo Investment Institute.
The energy industry is anticipated to produce “more gains as many commodities remain structurally undersupplied and as the bull supercycle is still young,” he wrote in a Jan. 3 research report.
Commodity prices often “move together over multiyear periods called supercycles,” one of which is believed to have begun in March 2020, LaForge wrote.
If the lagging oil supply the market has seen since 2021 persists, higher prices would result, he said.
The price gains may be “back-end loaded in 2023 as we anticipate a recession in the first half” of the year, LaForge said.
“Within commodity sectors we like energy the best and suspect that oil prices are on track for another positive year, driven by production challenges and strategic opportunities in large oil-producing countries,” he said.
By the end of 2023, crude-oil prices are expected to rise to $84 a barrel, according to a survey of U.S. oil and gas executives by the Federal Reserve Bank of Dallas.
Recession Would Impact Crude Oil Prices
Concerns about the prospect of a recession in 2023 remain. Economic growth is expected to slow, hurting employment, while housing issues are elevated due to high prices and high interest rates.
Crude oil prices are likely to decline during a recession, which many economists expect to occur this year.
With “the likelihood of a global recession taking hold by midyear, oil prices could well dip to $60 or lower by the end of 2023,” Weinstein said.
If the Russian-Ukraine conflict expands, disruptions to the global oil and natural gas supply chains would likely occur, he said. Demand would also “dampen,” he said.
Gasoline prices are expected to move higher from “tight supplies and the loss of Russian-refined products previously sold into the U.S. market,” Weinstein said.
Drivers should expect gasoline prices to increase by 20 to 30 cents a gallon if they are currently paying $2.50 a gallon or less, said De Haan.
Prices will rise 10 cents to 25 cents a gallon for drivers living in areas where gasoline currently costs $2.50 to $2.75 a gallon, while stations selling gasoline for $3 a gallon could soon increase prices by 5 to 10 cents, he said.
By late winter of 2023, prices could start inching up and reach $4 a gallon by the summer.
“2023 is not going to be a cakewalk for motorists,” De Haan said. “It could be expensive.”
On an average basis for the year, gasoline prices will decline by 50 cents a gallon in 2023 from the average 2022 price of $3.49 a gallon, De Haan said.
