What will gasoline & diesel prices be in 2022?

[Kirk W]

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U.S. regular gasoline retail prices averaged $3.02 per gallon (gal) in 2021, compared with an average of $2.18/gal in 2020. We forecast gasoline prices will average $3.06/gal in 2022 and $2.81/gal in 2023. U.S. diesel fuel prices averaged $3.29/gal in 2021, compared with $2.56/gal in 2020, and we forecast diesel prices will average $3.33/gal in 2022 and $3.27/gal in 2023.

US Energy Information Administration, Short Term Energy Outlook   Release Date: Jan. 11, 2022  |

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GasBuddy, the leading fuel savings platform providing North American drivers with the most ways to save money on gas, today predicts that 2022 may bring more sharp increases to gas prices - straining motorists’ wallets even more than the steep hikes of 2021. A national average of $4 per gallon is possible this spring, largely due to pandemic recovery and rising demand before relief, or additional oil supply, arrives later in 2022. GasBuddy expects the 2022 yearly national average gas price will rise from 2021’s $3.02 to $3.41 per gallon. 

GasBuddy: Gas Price Surge Isn’t Over: $4/gal Could Happen in 2022 Before Any Relief Arrives  December 29, 2021

Very different projections. Sounds a lot like predicting the weather for the next year.  😏

[LindaH]

2 hours ago, Kirk W said:

U.S. regular gasoline retail prices averaged $3.02 per gallon (gal) in 2021, compared with an average of $2.18/gal in 2020.

It's really deceptive to compare gas prices from 2021 to those of 2020.  2020 was the start of the pandemic and people stopped driving, so the price of gas fell like a rock.  The $3.02 price quoted in the article isn't that different from normal.  And even the current price of gas, which is higher (at least around where we live) isn't all that different from normal...I've seen it higher.  2020 was an outlier.

[pjstough]

It is easy to see why gas prices are rising. People are driving more than they did in most of 2020, and the production of crude oil is lagging behind demand.
One statistic that most people are not aware of is the dramatic drop in drilling for oil and gas in the last few years! In February of 2018 there were about 1100 gas and oil drilling rigs operating in the USA, but by August of 2020 that number had dropped to a paltry 250 oil and gas drilling rigs operating in the USA. Also, oil and gas drilling companies lost huge sums of money during the collapse of the economy in 2020. I believe at one time crude oil was trading at -$40.00 per barrel. Now these drilling companies are somewhat hesitant to start drilling again, however, the good news is that the number of oil and gas drilling rigs in the USA is back up over 500 and continuing to climb. Hopefully, it wont be too long until the supply of crude oil catches up with demand and we will see stabilization and perhaps a reduction in retail prices.

[Barbaraok]

Are we the only ones who see prices falling every week?   Not terribly fast like the rise, but they are falling.

[Kirk W]

1 hour ago, Barbaraok said:

Are we the only ones who see prices falling every week?

We have also been seeing a very slow decline in the Dallas area, although it seems to have stopped now and will vacillate up and down by 5 cents or so from day to day for the past couple of weeks. I saw the Gas Buddy report first and then did a search and found the other source. The contrast to what we have seen in this area is the main reason that I started this thread. I was wondering what others are seeing and also reading.

[bigjim]

Am currently near Memphis, TN since mid-Dec. and  have seen the price drop some then bounce back and drop again. Saw the same in Albq. area before i left there. Most of the rises had explainable reasons like spike in holiday driving. Even the weather has played a part. I would like it to be cheaper but I don't find it outrageous most places.

[Vladimir]

9 hours ago, pjstough said:

It is easy to see why gas prices are rising. People are driving more than they did in most of 2020, and the production of crude oil is lagging behind demand.
One statistic that most people are not aware of is the dramatic drop in drilling for oil and gas in the last few years! In February of 2018 there were about 1100 gas and oil drilling rigs operating in the USA, but by August of 2020 that number had dropped to a paltry 250 oil and gas drilling rigs operating in the USA. Also, oil and gas drilling companies lost huge sums of money during the collapse of the economy in 2020. I believe at one time crude oil was trading at -$40.00 per barrel. Now these drilling companies are somewhat hesitant to start drilling again, however, the good news is that the number of oil and gas drilling rigs in the USA is back up over 500 and continuing to climb. Hopefully, it wont be too long until the supply of crude oil catches up with demand and we will see stabilization and perhaps a reduction in retail prices.

I am not sure that is going to happen.

I was reading in the Wall Street Journal, where HALF the Wall Street banks have now decided  NOT lend money to the oil and gas industry due to climate change issues.  Likewise, many endowment funds have also decided to SELL their oil and gas holdings.  Of course, regional banks and small investors MIGHT decide to lend money to oil and gas companies to make up the difference.  I don't know.

But the lack of access to financing it going to make it very difficult for the oil and gas industry to raise new capital.  In response,  all the large multi-national companies are cancelling their exploration efforts and focusing on pumping only from existing wells.

So the long-term supply picture is declining supply, unless Russia and the Middle-East countries make up the difference to catch up with demand and both those regions need higher prices to support their economies. 

Long-term gas prices are going up and up and up.

Short-term for 2022.  I think it really depends on the economy.  We are long, long overdue for a recession and the Federal Reserve is making noise about raising interest rates this spring.  If we end up in a recession I think you will see gas prices go down, but I firmly believe the long-term trend is gas prices increasing at a higher rate than inflation.

Here in eastern Washington, gas prices have gone up significantly in the past week....by 40 cents a gallon.