Americans will spend nearly $365 billion on gasoline in 2018, or about $25 billion more than last year, according to a forecast by analysts at the fuel-technology company GasBuddy.
Prices will remain well below record-breaking levels, the analysts say, with the yearly average settling at about $2.57 -- the highest since 2014. But weather-related disruptions like those that upset the supply chain in 2017 could push prices to $3 or more.
A big factor in the projected increase this year is OPEC’s decision to cut oil production, which took effect a year ago. That brought down global inventories of crude oil and pushed year-end prices to close to $60 a barrel. In the US, inventories are down by some 50 million barrels from January 2017, while exports of domestic crude have hit record levels.
In November, OPEC, Russia and non-OPEC oil producing companies agreed to continue the production curbs through this year. With global and US demand for oil increasing, the GasBuddy analysts say "it stands to reason that 2018 will be on course to see a corresponding rise in pump prices."
Patrick DeHaan, head of petroleum analysis at GasBuddy, said other factors -- including the overall strength of the economy and refinery output -- could also impact prices at he pump this year.
"Ultimately, OPEC bears much of the responsibility," he said. "Yet, understanding many factors, including OPEC, fuel taxes, the economy and their impact on supply and demand is integral to providing a thorough and balanced outlook on gas prices. Even one event can completely change the trajectory of fuel prices for months."