On 2 December, the U.S. average price of a gallon of regular unleaded gasoline was $3.43, data service OPIS reported, almost a third less than highs of $5 or more reached in June.

Gas prices have fallen as global demand for oil shrinks along with the world’s economic pace, especially in China, The Wall Street Journal said. (See “China’s Economy Continued to Decline in November” in this issue.)

China’s ongoing lockdowns will cut the world’s oil demand by a million barrels a day this month, a Capital Economics research report said.

Also, some refineries that had been closed for maintenance and upgrades to equipment have reopened, sending more gasoline into the market.

Prices should continue downward beyond the holiday season, OPIS chief analyst Tom Kloza told The Wall Street Journal, adding that “the next 60 days look really, really hospitable for consumers” in terms of gasoline prices.

In the U.S., the shift to remote work has permanently cut gasoline demand.

In the last week of November, gasoline demand in the U.S. was 10 percent less than in the same week of 2019, the EIA said.

TREND FORECAST: China has reduced its strict zero-COVID policy which, should they continue to ease it, will increase demand for gas and oil, thus driving up prices. Where gas and oil prices are going will also be determined by geopolitical factors including the Ukraine War, tensions in the Middle East, and how deep the recessions hit the United States, Europe … and the world. 

Thus, overall, we maintain our forecast for rising oil and gas prices as winter sets in and geopolitical conflicts increase.