According to projections by GasBuddy, gas prices in the United States are expected to decrease for the second consecutive year in 2024. This forecast, coming from a source with a track record of accurate predictions, offers a glimpse of potential relief for consumers and the broader economy.
Predictions of Lower Fuel Costs
GasBuddy's analysis indicates that the average gas price in the U.S. will be around $3.38 per gallon in 2024, a notable decrease from the $3.51 average in 2023 and significantly lower than the $3.95 average in 2022.
Despite ongoing geopolitical tensions, including the Russia-Ukraine war and potential escalations in the Israel-Hamas conflict, GasBuddy remains optimistic about a further reduction in gas prices. The forecast suggests that Americans could spend approximately $32 billion less on fuel in 2024 compared to 2023, and $79 billion less than in 2022.
Patrick De Haan, GasBuddy’s head of petroleum analysis, conveyed a positive outlook in his interview with CNN. “Next year should represent a continued march towards what most Americans would consider normal prices at the pump,” De Haan stated.
Implications for Consumers and the Economy
The projected decrease in gas prices is a welcome development for consumers, who are highly sensitive to fluctuations in living costs, particularly fuel prices. Furthermore, lower gas prices could give the Federal Reserve more leeway in its efforts to stabilize the U.S.
economy. By managing inflation without triggering a recession, the Fed aims for a 'soft landing.' While gas prices are a significant factor, they are not included in the Fed's core inflation gauge. GasBuddy’s optimism about the 2024 price outlook is partly attributed to America's robust energy production.
The U.S. is set to break records in oil production, according to S&P Global Insights. This high level of domestic production not only challenges perceptions of President Joe Biden's energy policies but also provides a buffer for consumers against global volatility that can rapidly escalate fuel prices.
As De Haan summarizes, “The US producing record amounts of crude oil translates to lower risk”.