On Thursday, energy industry analysts announced that gas prices in the U.S. are likely to continue to rise in 2022, with a national average of $4 per gallon possible before prices decline.
GasBuddy shared a report this week that predicts the national average gas price will be at least $3.41 per gallon in 2022. GasBuddy operates an app tracking national gas prices and provides expert analysis of historical and predicted trends.
Patrick De Haan is the director of petroleum analysis for GasBuddy and says he sees a “worst-case scenario” that could see prices over $4 per gallon. He predicts a peak before Memorial Day 2022 of at least $3.79 per gallon. A reduction to around $3.57 per gallon in June and July is expected to follow.
Gas prices this Christmas Day were the highest ever recorded on December 25, sitting at over $3.26 per gallon.
Many economists have blamed increasing American gas prices on higher demand for energy as the economic impacts of the COVID pandemic have eased. Increased travel for work and leisure has led to greater needs for gas. De Haan said demand has “roared back,” and supply is still ramping up after massive supply cuts in the last two years.
Predictions for gas price increases in 2022 are disappointing, especially in light of the slow reductions in price seen in the last several weeks. The national average of $3.29 per gallon at the beginning of this week is down from $3.42 per gallon on November 8.
The Biden White House has been taking credit for the recent reduction in prices, mainly citing the decision by Joe Biden to release 50 million barrels of crude oil from America’s Strategic Petroleum Reserve on November 23. Despite that claimed success, the administration has urged oil producers globally to increase supply.
Biden’s Energy Secretary Jennifer Granholm used an appearance this month at a meeting of the National Petroleum Council to ask domestic energy executives to increase oil and gas supply. She said that she understands disagreement with the Biden administration’s domestic energy production policies but didn’t mean that the administration is “standing in the way” of meeting current gas demand.
Granholm told producers that they should “take advantage” of the leases that they do have and should hire more workers. She did not offer a way to say to shareholders that further investments in production that the federal government is ruthlessly attacking could be justified.