STATEWIDE--Many stations in Indiana will see gas prices reach as high as $3.29 per gallon this week. There are factors, however, that could indicate a price drop soon.
“Given the downdrafts in the market yesterday and today, these increases could be quicker to erode,” said Patrick DeHaan, head of petroleum analysis for GasBuddy, in a tweet Wednesday morning.
Demand for gas is weak. When demand is weak, people don’t travel as much.
“For January and February, now that the holidays are over, people are hunkering down and going to a bit of a hibernation mode. That could bring prices down. That and the fact that refineries are restoring output and getting back online after they were hit hard by the winter storm to end 2022,” said DeHaan.
Oil prices have been hovering around the $70 per barrel mark. If those keep dropping, then prices at the gas pump will drop as well.
“It’s just best if you’re not in a hurry to fill up. Just wait a few days,” said DeHaan.
China had spent the latter parts of 2022 under COVID restrictions, but that country has been lifting COVID restrictions lately. That is a factor that can drive prices up.
“What does that mean? Well, China is the largest oil importer globally. So, the oil market is getting excited about an increase in demand from China,” said DeHaan.
DeHaan is also concerned about the recent rhetoric from Russia.
“Russia did make a threat that it’s going to cut off other countries from oil starting February 1 that engage in a price cap, so that’s something to watch,” said DeHaan.
That oil output cut could range from anywhere between 5 and 7%. That could amount to 500,000-700,000 barrels per day.