Gas prices still rising but may start to decline as demand drops: AAA
Lower gas prices boosted consumer confidence in December, a report said.
High gas prices continued into the second week of 2023 as the effects of the frigid holiday weather lingered, according to AAA. (iStock)
Gas prices, which had been rising due to colder weather and holiday travel, may start to drop again, according to the latest report from AAA.
The national average cost for a gallon of gas rose to $3.28, seven cents more than last week. However, following the post-holiday climb, there is some indication that prices are beginning to flatten and even dropped by a penny in some states over the weekend, AAA said
"As we head toward February, pump prices will likely dip, barring any jolt in the global oil market," AAA spokesperson Andrew Gross said in a statement. "But it is likely that the national average prices we saw heading into Christmas may have been the lows for this winter."
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Closed refineries impact supply and prices
The higher prices that kicked off the new year may be down to lingering aftershocks of the unexpected holiday season cold snap that saw several refineries close across the nation, according to GasBuddy.
As refineries come back online, it's likely to contribute to decreasing gas prices.
"As long as refiners are able to get back online soon from previous cold-weather outages, we could see supply start to recover at the same time demand is weak, which could bring gas prices down again," Patrick De Haan, GasBuddy head of petroleum analysis, said in a statement. "The window of opportunity, however, is shrinking, and by late February or early March, we'll likely kick off the seasonal rise in gasoline prices."
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Lower gas prices boosted consumer confidence, report says
The dip in gas prices has helped boost consumer confidence, according to a recent report.
U.S. consumer confidence spiked to 108.3 in December, an increase from 101.4 in November and the highest level since April, the Conference Board Consumer Confidence Index for December said. Inflation expectations also dipped in December to their lowest level since September 2021.
"Inflation expectations retreated in December to their lowest level since September 2021, with recent declines in gas prices a major impetus," Lynn Franco, The Conference Board senior director of economic indicators, said in a statement.
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