Gas prices expected to fall in 2024 as domestic production grows
Breanne Deppisch
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Gasoline prices are expected to fall further in 2024 as domestic production continues to grow, according to two new reports, giving drivers and their wallets relief after two years of above-average prices.
According to a new projection from gas price tracking company GasBuddy, United States gasoline prices could fall to an average of $3.38 per gallon in 2024, a 13-cent decline from 2023 and a 57-cent drop compared to average prices in 2022.
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The U.S. Energy Information Administration projected an even larger 17-cent drop in gasoline averages for the coming year in its Short-Term Energy Outlook, published earlier this month.
The change is due in large part to U.S. oil production, which is currently at record levels. Weekly domestic production surpassed 13 million barrels of crude in December, according to EIA data, breaking the U.S. record set in the pre-pandemic months of 2020.
Crude prices account for more than half of U.S. retail gasoline prices. U.S. production, coupled with the slowdown in the economy this year as the Fed has raised interest rates, “has given us a little bit of breathing room,” GasBuddy’s head of petroleum analysis, Patrick De Haan, told the Washington Examiner in an interview.
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Markets also have recovered from some of the shock surrounding Russia’s invasion of Ukraine, GasBuddy noted in its report.
“I think some of the shockwaves from Russia’s war in Ukraine have continued to fade into the rearview,” De Haan told the Washington Examiner. That will “give a little bit more breathing room for oil prices to be lower this year.”