EIA says national average will soon hit $3 a gallon
Gas prices are on the way down, hitting a seven-week low with a national average of $3.34 per gallon Wednesday. The U.S. Energy Information Administration forecasts even lower prices to see out the year and into 2022. The administration’s projections say gas prices will $3.13 in December and $3.01 in January, with an average below $3 for the duration of 2022.
It’s not all good news at the pump, however. While the U.S. tapping into strategic reserves will help and worldwide production is poised to ramp up, part of the current drop is because fears of the omicron COVID variant have slowed human activity and energy consumption.
“This is a very complicated environment for the entire energy sector,” EIA Acting Administrator Steve Nalley said in a statement. “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.”
Still, with daily oil production expected to approach 12 million barrels per day in the coming year, even in a booming economy with high demand Americans could be paying an average of $2.88 per gallon in 2022.
“These savings are beginning to reach Americans and should pick up in the weeks ahead. And it can’t happen fast enough,” President Joe Biden said last Friday.
Natural gas prices have also fallen, dropping 11% on Monday and with futures declining by 50% this fall. That drop stems from high temperature forecasts for winter, which while perhaps temporarily convenient bode ill in the long term health of the environment.