As gas prices are set to close out 2016 on a high note, drivers should prepare to pay even more at the pump next year, according to a national gasoline-price tracker.
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The average price of a gallon of regular gasoline now tops $2.30 nationally, according to AAA. A month ago it was $2.13, with prices rising 30 of the last 33 days. New Year’s Day 2016 it was $2.00.
An analyst at Gas Buddy told FBN’s Jeff Flock that gas prices would likely remain on the rise in the first few months of 2017.
“[The analyst] thinks we’re going to see an increase of, by Spring, of another 20 to maybe 40 cents, which would be the highest we’ve been since the Spring of 2014—so the highest in three years,” Flock reported.
But, the price surge might not stop there. Former Shell Oil President John Hofmeister told the FOX Business Network he believes the price of gasoline could climb back to $3 a gallon.
“If we get the $20-25 dollar a gallon price rise in crude oil [over the course of 2017], I think that’ll translate into roughly $3 dollars a gallon, which is still a reasonable rate for most consumers, given their history over the last decade or so,” he said.
Hofmeister based his logic on two conditions.
“One, OPEC sticks with its production cuts, which it really needs to do because they’re not paying for all of their government expenses with the current oil price even at $53,” Hofmeister explained. “And the second thing is that demand continues to rise, even if slowly.But if we don’t see more demand around the world that could slow down that price rise.”
According to a survey from the AAA Foundation for Traffic Safety, U.S. drivers spend an average of more than 17,600 minutes behind the wheel each year. Hofmeister says that mixed with usage in China, India and other parts of the developing world could contribute to the growing demand for the black gold.
“What you see is a continuation of traditional demand plus additional new demand,” he said. “And it all depends on the state of the world economy and also the state of geopolitics… So I think the signs are for an upward movement in oil prices.”