Officials from the Energy Department increased their predictions for gas prices today and cautioned that oil futures are expected to remain above $100 a barrel in the upcoming weeks.
The worsening projections from the US Energy Information Administration highlight the magnitude of the energy crisis that is increasing living expenses.
Retail gasoline prices are projected to average $3.88 per gallon this year and $3.62 next year, based on the latest EIA forecasts. This marks an increase from the EIA’s prediction made a month prior, when officials anticipated $3.70 per gallon this year and $3.46 the following year.
Certain analysts caution that the national mean might ultimately reach $5 per gallon.
Although President Donald Trump has occasionally stated that the Strait of Hormuz is open, the EIA’s projection assumes that the critical waterway will “stay largely closed until late May.” The EIA anticipates that traffic will restart in June, but only “slowly” and will not return to normal levels until the year’s end.
This is the reason the EIA currently anticipates a significantly greater drop in the global oil inventories that serve as shock absorbers.
Officials anticipate that Brent crude oil, the global benchmark, will stay close to $106 a barrel in May and June, in contrast to approximately $70 prior to the onset of the war with Iran.
About the Author
