HUNTSVILLE, Ala. – 2021 was an intense year for gas prices with prices at the pump at one point reaching a seven-year high before slowly backing off.
Throughout the month of December, Huntsville saw prices drop slightly. However, they could soon be on the rise again.
A forecast from tech company GasBuddy predicts by Memorial Day, there’s a chance gas prices could reach as high as $4 per gallon, with a 2022 national average of about $3.40 per gallon.
“All of this really has to do with the first six months of the pandemic. When Americans just abruptly stopped commuting, stopped driving,” GasBuddy Head of Petroleum Analysis Patrick De Haan said.
The halt in so many day-to-day activities in 2020 forced oil companies to take drastic measures to adjust to the drop in demand, including terminating tens of thousands of employees, according to De Haan.
That decrease in workers is just one reason he said some companies continue struggling to recover.
“They’re scrambling to bring workers back. They’re scrambling to increase production,” he said.
He said U.S. oil production has gone up but not enough to solve what De Haan calls a continuing ‘mismatch of supply and demand’, as more Americans return to the roads for both work and travel.
“Demand has been very strong and continues to go up not only in the US but globally. Oil production continues to be quite a bit short of where demand is. That’s a problem that will probably worsen before it gets much better,” De Haan said.
What he’s referring to is a trend of higher rates of travel once the weather begins to warm each year, and he said if prices begin to rise nationwide, we will also pay more at the pump in Alabama.
“Prices generally are at least or around 30 cents lower than the national average, so if we hit that $4 a gallon mark nationally, Alabama will probably only be in the three seventies or so,” he said.
If the projections are correct, GasBuddy also predicts gas prices leveling out and beginning to dip in the July to August timeframe.
De Haan said it is even possible 2022 could end with drivers paying less than $3 per gallon.