The worst could be over for gas prices this spring

By Matt Egan | CNN

New York — Israel and Iran have been in open conflict. Ukrainian drones have repeatedly attacked Russian oil refineries. And OPEC continues to hold back oil supply.

All of these alarming developments raised fears of $4 gas that would hurt the US economy and worsen inflation.

Yet that has not happened, at least not yet. US gas prices have stopped rising and even briefly dipped in recent days.

The national average stood at $3.66 a gallon on Monday, down from $3.68 a week ago, according to AAA.

Now, there is growing hope that gas prices are at or near a peak for the spring – or perhaps even for the year.

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Patrick De Haan, head of petroleum analysis at GasBuddy, is predicting drivers will get relief at the pump in the coming weeks.

“I’m hoping the worst is behind us,” De Haan told CNN. “Unless there is something drastic that happens, there are increasing odds the national average has hit the projected spring peak.”

Tom Kloza, global head of energy analysis at the Oil Price Information Service, also expects gas prices to dip in the coming weeks.

“Most of the worries for the first half of the year are over. I think we’re in the clear until hurricane season,” said Kloza.

‘Could have been much worse’

Of course, none of this is to say gas prices are cheap. They were lower in April 2021 as well as in the spring of 2020 when Covid-19 kept many Americans off the roads.

Still, a springtime peak below $3.70 a gallon would be a win for consumers given the real risk of significantly higher prices at the pump.

“It could have been much worse,” said Andy Lipow, president of consulting firm Lipow Oil Associates.

Drivers in just seven US states are paying $4 a gallon or more for gas, according to AAA. All of those states are in the Western half of the country, led by California, where the state average is $5.40 a gallon, up from $4.88 a year ago.

The national average is nowhere near the unprecedented spike above $5 a gallon in June 2022.

“It’s clear to me this is not going to be a record-setting year. It will feel much more normal to fill your tank this year,” said De Haan.

Economic, political consequences

Officials in Washington would also likely be breathing a sigh of relief.

Rising gas prices earlier this year have contributed to worse-than-expected inflation readings that have cast doubt on when the Federal Reserve will be able to lower interest rates.

A spike in gas prices would be the last thing President Joe Biden needs as he struggles to convince voters of his economic message before November. Biden’s approval rating for the economy stands at just 34% and it’s even lower (29%) for inflation, according to a new CNN poll.

Underscoring concerns in the White House about gas prices, earlier this month the Biden administration backed off concerns to buy crude oil for the US Strategic Petroleum Reserve, the emergency oil stockpile.

Some analysts expect gas prices to still go a bit higher.

Lipow said he thinks the national average will peak at $3.75 a gallon this year.

Still, that would be below the peak of $3.88 a gallon last year – a peak that didn’t occur until September.

“I’m not looking for a spike in gas prices,” Lipow said.

Why gas prices have cooled

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