People who follow and forecast gas prices haven’t seen a truly “normal” year in a while. Next year could be that year.
Pump prices fell dramatically in pandemic-plagued 2020, recovered in 2021 and spiked dramatically amid the Ukraine invasion and runaway inflation of 2022.
By comparison, 2023 has unfolded somewhat more predictably at the pump, despite lingering inflation and war in the Middle East.
Experts hope for even more stability in 2024, with fuel prices starting lower and staying lower than in 2023.
“We’re getting back to sort of normalcy when it comes to pump prices,” said Patrick De Haan, head of petroleum analysis at GasBuddy, a gas-price tracking service.
Gas prices at American pumps tend to follow a seasonal cycle
In a normal year, gas prices follow a seasonal cycle, bottoming out in the depth of winter, when people drive less, and rising steadily through spring and summer, when temperatures are warmer, days are longer, and Americans drive more.
That is more or less what happened in 2023. Gas prices started the year around $3.20 a gallon, federal data show, surged past $3.75 a gallon from late July through September, then retreated to the $3 range in December, yielding the cheapest fuel of the year.
“I like to tell people that there’s an American energy calendar that people can follow,” said Devin Gladden, spokesperson for AAA.
Pump prices should remain low through December and may even fall further in January, forecasters say. The start of each year generally brings a low ebb of car and truck travel. And gas is cheaper to refine in winter because refiners use a less costly formula in cold weather.
“You’re going to hear a lot of chatter at holiday cocktail parties about, ‘Oh, isn’t gas cheaper,’” said Tom Kloza, global head of energy analysis at the Oil Price Information Service.
If gas prices follow the normal seasonal cycle in 2024, pump prices will follow a gently sloping arc from January through December. That is essentially what happened in 2023. Some forecasters expect a similar pattern in 2024 but with slightly lower prices.
“I think it’ll be more of a normal year,” Kloza said. “Let’s hope so. I think demand in the United States for gasoline will be about what it was this year, maybe a little lower. There’s plenty of supply.”
If you plot next year's gas prices on a graph, 'the 2024 line will be below the 2023 line'
If you plot pump prices on a graph, as someone at AAA is bound to do, “the 2024 line will be below the 2023 line,” Gladden said.
But that forecast comes with caveats.
The biggest one, perhaps, is the ongoing conflict between Israel and Hamas.