Posted on: 08. 05. 22
This year, we’ve been very vocal about the costs of producing consumer oil and gas and how much everyone is paying at the pump.
Regions of the United States even saw gas prices that exceeded $7.00 a gallon. Fortunately, after the nation celebrated the 4th, we were able to start celebrating lower gas prices.
Let’s reiterate what controls gas prices, how lower prices will impact local and national economies, and what, if anything, will determine if gas prices remain affordable.
How Do Gas Prices Affect Economy?
Now that gas prices are lower, local economies will experience a more regular financial ebb and flow. Lower gas prices mean consumers are more willing to spend money at the pump, get out, experience entertainment and go shopping in local and surrounding areas.
Lower gas prices that remain low could even lead to reduced costs in the transportation industry, resulting in lower prices at local markets.
In short, when wealth is spread, everyone benefits.
What Determines if Gas Prices Continue to Fall?
Low gas prices are great, but several factors must be considered when hoping for a plateau or even lower gas prices.
Recession Fears
Demand is a massive factor driving oil prices up and down. In most cases, increased demand leads to higher prices. However, the government has been working hard to drive down inflation through increased interest rates for borrowing consumers.
Moves to decrease inflation could be too late. A downturn in consumer spending could signal an oncoming recession. What does this mean for current gas prices? A lot!
When investors start to sniff out financial problems at a national level, they’ll begin to sell off investments. Oil and gas are usually the first to go.
An impending recession leads to movement in oil prices, which could lead to even lower prices at the pump.
It’s a double-edged sword. We’ll keep an eye on prices for you and help you stay on track with how gasoline reflects nationwide economic circumstances.
The Weather Matters
As strange as it sounds, the weather between now and this time next year could have an impact on how much gasoline costs.
According to energy analyst Tom Koza, we haven’t seen the last of rising gas prices. They could rise higher than anything we’ve experienced.
Koza says that depending on the activity during the summer hurricane season on the Gulf Coast, oil refineries the United States relies on could be threatened, therefore, bringing back higher prices by the end of August.
Demand, Demand, Demand
During the summer, gasoline prices are expected to increase. We are living through unprecedented circumstances that make the summer crunch even tighter on the budget. The sanctions on Russian exports have substantially increased the cost of gasoline and will keep prices high until issues are resolved.
As prices reduce while demand increases, the current lower prices could spike up again. However, as the summer rush fades and people get back into their everyday routines, demand could subside and lead to prices as reasonable as possible until geopolitical tensions improve.
Keep Your Facility Producing with Pro-Gas LLC
As a Texas oil and gas facility manager, you should consider it your responsibility to help keep gas prices low. Through consistent production and a reliable equipment supply, your facility could increase its output for the rest of the year and reduce the pain of a pressured wallet at the pump.
Pro-Gas, LLC offers the equipment your site needs for effective production. From conditioning equipment to storage, our manufacturers have you covered.
Contact us to learn more about our current availability in your area.
