Author: Ann Marshall
After Russia invaded Ukraine, the global oil market felt the effects, leading to a sharp decrease in demand and an abrupt price drop. This has led to a remarkable decrease in gas prices, reaching record lows since the beginning of Russia’s invasion.
Despite the ups and downs of the world economy, gas prices have stayed consistent and low.
Here’s what you need to know about this recent turn of events.
Gas Prices had gotten lower than before Russia invaded Ukraine.
As gas prices continue to fall, they are now below what they were during Russia’s invasion of Ukraine. According to AAA, the current national average for a gallon of standard gas is $3.47.
Compared to that, the average price on February 24, the day when Russia invaded Ukraine, was $3.54. This is around 12 cents less from the previous week and 29 cents from the previous month.
For the first time starting since February, the national rate for a gallon of gasoline dropped below $3.50 the past week. Investors’ concerns about potential issues from a Russian invasion of Ukraine caused gas prices to rise in January and February.
What are the main factors of unstable gas prices? Their impact on the World.
The decline in gas prices results from several reasons.
Energy prices have suffered due to worries about a possible recession and China’s Covid lockdowns.
Other reasons include less frequent interruptions of Russia’s oil supply than anticipated and the Biden administration’s record-breaking release of oil from emergency reserves.
Gas prices have reversed the surge brought on by the war in Ukraine, even though they are still high for this time of year. This surge made inflation worse and raised worries throughout the world. Since reaching a high point of $5.02 per gallon this past June, the national rate has decreased by $1.55.
What will be the prices in the future?
Some analysts said that gas prices will continue to decline in the future. However, because of OPEC policies and China’s Covid lockdowns, it is still unclear where oil prices will move in the future.
The national rate price of gasoline may fall to $3.28 by Christmas, according to Andy Lipow, owner of the consulting firm Lipow Oil Associates. So, prices would be lower this Christmas than they were last year.
A fuel price tracking app, GasBuddy is even more positive than usual, suggesting this week that gas prices may fall under $3 per gallon by Christmas.
According to GasBuddy’s head of petroleum analysis, Patrick De Haan: “that would be a huge gift to unwrap for motorists after a dizzying year at the pump.”
Final Words
The global oil market has seen remarkable changes since Russia invaded Ukraine, with gas prices falling to record lows. While prices remain relatively high for this time of the year, there is potential for them to continue to dip, with some forecasters predicting the national average for gasoline could drop under $3.28 a gallon by Christmas.