As gas prices drop in W.Va., experts analyze future trends
Feb. 10—FAIRMONT — According to AAA, throughout the month of January, gasoline prices across North Central West Virginia dropped, but experts are not convinced that trend is sustainable.
The weekly average of gas prices from January 29 to February 4 was $3.468, according to AAA's East Central's Gas Price Report, while the previous week's average was $3.490. The week of January 31, 2022 had an average of $3.113. Across the country, gas prices have jumped reaching an average of $3.50 per regular gallon, according to Associated Press.
Heather Stephens, Regional Research Institute director and associate professor of resource economics and management at the Davis College of Agriculture, Natural Resources and Design at West Virginia University, said the decrease in gas prices is likely stemming from the end of the holiday season.
"Gasoline prices are a pretty classic example of markets that respond quickly to changes in supply and demand. And, you know, over the holidays, you have people traveling more, so the demand for gasoline goes up. That, coupled with the fact that there were some pressures on the oil supply, which has been converted into gasoline from the Russian and Ukrainian war," Stephens said.
Stephens said there are a variety of factors that impact gas prices. The most common we are experiencing now include supply and demand from travel and issues that come from buying gasoline or crude oil in other countries.
Stephens said if OPEC, the Organization for Petroleum Exporting Countries, which many of the world's highest oil-producing countries belong to, decides to remove production cuts that were put in place in 2022, it will put more oil on the market and reduce prices.
"But we also could see on the supply side, our sort of gasoline supply in the U.S. is highly sensitive to refineries being online and processing the oil into gasoline. Some of the increases we saw in 2022 in price were due to refineries having to go down for maintenance," Stephens said.
Because of all of the unpredictable factors, it's hard to say what gas price trends will be and Stephens said she can only make estimated guesses as to what trends will look like as we approach summer.
"Going into the beginning of this year, you had some disruptions to the oil supply, which means there's going to be less gasoline to sell. And you get that holiday rush, which pushes prices back up because more people are buying gasoline. So in the short run, I would expect to get a little bit of relief prices will go down a little bit. But then there's a whole lot of questions about what will happen as we go into the summer," Stephens said.
Stephens said prices could go up because of summer travel, but a bigger issue is what's happening in China. Since the beginning of the COVID-19 pandemic China has had strict lockdowns, which caused their need for oil to be very low. As they loosen lockdown restrictions and people begin leaving their houses more, the demand for gas in China could increase and affect prices worldwide.
"Although a higher dollar contributed to pushing prices lower at the end of the week, oil prices rose earlier last week amid ongoing market optimism that global oil demand will be more robust than anticipated in 2023. This is partly due to China re-opening its economy after imposing strict COVID-19 lockdowns that curtailed demand," according to AAA.
Increases in gas prices can place a burden on residents across the state and in North Central West Virginia, as in many areas, it is difficult to get around without a vehicle, Stephens said. She has looked at ways that people could potentially save money by only going to the grocery store when coming home from work, but she said there are trips you cannot chose to avoid.
"Some trips are just not optional. Anyone that has to commute to work or school is going to be bearing the higher cost of gasoline and, while gasoline isn't the most expensive in West Virginia, you know, compared to other states, it's relative to income and it's high compared to some other places," Stephens said.
Stephens co-wrote two articles with more information on gas prices and how they rise and fall, which are linked here (Gas Prices 101) and here (Gas Prices 102). To find current gas prices nationwide, statewide, and countywide visit gasprices.aaa.com.
Reach me at sshriver@timeswv.com or 304-367-2549.
