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The national average price of regular unleaded gas fell to about $3 per gallon early in the winter, marking the lowest level since the spring of 2022. Unfortunately, prices at the pump have since ticked higher, now averaging $3.11 per gallon. That’s still a lot lower than gas has been for much of the past couple of years. But odds are, prices at the pump will continue to trend higher as spring nears. That is the typical seasonal pattern for gas prices, in part because demand starts to build after dipping during the winter, and partly because refiners begin switching over to making summer-blend gas as the weather warms up. Summer formulations are a bit more expensive to make than winter-blend gas.
If the pattern from recent years prevails again this spring, look for the national average price of regular-grade gas to near $3.50 per gallon sometime this spring or early summer. Diesel, now averaging $3.66 per gallon, is up 15 cents from a month ago, and is also likely to head higher this spring, perhaps to about $4 per gallon.
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Crude oil prices have eased a bit after a rally earlier in January, with benchmark West Texas Intermediate recently trading at about $72 per barrel. We look for it to trend a bit higher as winter progresses, getting into a range of $75 to $80. That would also push gasoline prices somewhat higher.
Natural gas prices have retreated after a sharp rally prompted by bitterly cold weather earlier this winter in the East, Southeast and Midwest. The benchmark gas futures contract spiked briefly to over $4 per million British thermal units, before pulling back to $3 on much warmer weather. Still, that’s well above the $2 or so that gas traded at for much of 2024. Stockpiles of gas in underground storage have dwindled substantially due to the recent cold snap, and are now slightly below average for this time of year. If cold weather returns for a sustained period, gas futures could easily take another run at $4 per MMBtu. For now, though, we expect them to stay near $3.
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