Gas Prices Are Dropping, But Will They See A New Spike Soon?

In what should be a sign of relief for consumers plagued by inflation, gas prices have been on a downward trend for the past month, with prices steadily dropping and hopefully continuing in a similar fashion. However, some experts are warning that prices could increase again in the future, meaning Americans shouldn’t get too comfortable with lower prices.

According to AAA, the average price per gallon of gas as of Saturday sat at $4.55 a gallon, the lowest it has been since peaking at a $5.02 average in June. The average cost per state does vary, with California still topping the nation’s average price at $5.92 a gallon, while South Carolina is averaging the lowest price at $4.05. Experts also believe that gas prices will continue to fall, as the average cost of oil has also declined, NBC News reports.

“Barring any unexpected refinery issues, hurricanes, and geopolitical changes, we could see the national average fall under $4 per gallon by mid-August,” Patrick De Haan, head of petroleum analysis at Gas Buddy, told NBC.

However, some experts warn that even if prices continue to fall now, when summer comes to an end, prices could once again surge by October, as concerns about pricing tied to stricter sanctions on Russia could lead to an even bigger choke on the global oil supply. According to The Washington Post, J.P. Morgan has warned that in a worst-case scenario, where Russia could shut down its supply entirely, the price of oil could jump to $380 a barrel, which is more than triple where it is today.

“If you were to ask me where could oil prices go, I would say pick a number,” Michael Tran, managing director for global energy strategy at RBC Capital told WaPo. “This is the tightest oil market we have seen in a generation or more.”

That news could be disheartening, especially to Americans who are still feeling the effects of record inflation, which soared to 9.1% in June. While retail spending rebounded that same month, indicating that consumers were still spending money anyway, warning about a massive surge in gas prices coming up could dampen those figures in the upcoming months.