S3-5: What Drives Gas Prices?
Gas prices have been on a roller coaster ride in 2022. In the first half of 2022, Russia’s invasion of Ukraine drove energy prices to their highest point in well over a decade. Ongoing supply chain disruptions, lingering from the pandemic, and shuttered refining capacity translated those oil prices into all-time high gas prices at the pumps for US consumers. And all of that was a major contributor to inflation. But in recent weeks, we have start to see gas prices moderate, though still near historic highs, and with it, inflation too. The hopeful question it leaves us with is – are these gas prices here to stay? To answer that, we need to better understand what drives gas prices.
What Drives Gas Prices?
This year, we’ve seen oil prices soar to near all-time historic highs in the immediate aftermath of the Russian invasion. What consumers paid at the gas pump actually did hit an all-time high, as supply chain and refinery constraints pushed retail gasoline prices up over $5 a gallon.
Energy prices have been one of the significant drivers behind inflationary pressures we’ve seen over the last year… and in recent months, now that energy prices have started to abate, inflation is as well. But energy prices still remain high by historical measures.
Back in February, Patrick DeHaan, Gas Buddy’s Head of Petroleum Analysis, joined us to talk about what was happening in energy markets, and what a Russian invasion could mean for energy prices. His comments proved highly omniscient.
I’m excited to have him back today to give an update on energy prices, including how energy prices are determined, the major factors impacting energy markets today, as well as what his near and longer-term outlooks are for energy prices so you can financially prepare.
We cover what drives gas prices, including:
- What are the major drivers in the current energy market
- The role of Russia, China, India, and Russian sanctions on gas prices
- Why gas prices have fallen since summer, but are likely to go up again
- Why the longer-term outlook for gas prices is likely higher and more volatile
- His best ideas for a smoother energy transition with less costs to consumers
- … and more!
About Patrick DeHaan
Patrick has analyzed and tracked oil markets and fuel prices for nearly two decades. A graduate of DePaul University, Patrick has a degree in Business Economics and has concentrated on downstream oil markets, including crude oil, gasoline, diesel and jet fuel since 2005, when Patrick and a professor at Grand Valley State University launched a blog in that shared oil market insights and predicted gas price movements. With a solid foundation, Patrick went to work with GasBuddy, the best fuel-price tracking service in existence, providing expertise for millions of users. Since his start, he has provided regular commentary to U.S. News and World Report and is often quoted during gas price gyrations and fuel disruptions by almost all U.S. and international media outlets.
You can learn more about Patrick at patrickdehaan.com, get his daily insights on energy markets on Twitter @GasBuddyGuy, and check out the Gas Buddy app to find the cheapest gas in your local area to save you money!
Oct 1, California Gov. Newsom waived RVP requirements & what happened? #GasPrices started to plummet. As a result, he can get some credit for part of the decline- & but also that’s why politicians there are partly responsible for high prices in the first place- stringent regs.
— Patrick De Haan ⛽️📊 (@GasBuddyGuy) December 14, 2022
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