Gas prices are expected to remain high over the holidays and rural Vermont drivers will have to accommodate those added expenses despite President Joe Biden’s move to release strategic oil reserves.
According to a new report by Gasbuddy, Vermont’s gas prices rose 7 cents over the past month, and it’s $1.34 higher per gallon than a year ago. These trends mirror the national averages, including gas per gallon is up 7 cents in the past month and $1.28 since a year ago.
The recent high in the state was found in Woodstock, where prices are $3.72 per gallon; the lowest price was $3.20 in Middlebury.
According to Patrick De Haan, head of petroleum analysis for GasBuddy, oil prices have recently come down by about $10 per barrel from a peak of $85 per barrel, and that could translate to lower or sustained prices at the pump over the coming months. He cautioned that the stabilizing of prices would have more to do with the release of strategic reserves than any tangible changes in national energy policy.
“While there’s reason to be optimistic that the peak of gas prices will soon be behind us, the decline in the price of oil is likely reflecting the possibility of a coordinated global release of oil from strategic reserves,” he said. “If that doesn’t happen, oil could again rally.”
He adds that if societies start to close down again due to fear of the coronavirus, then that could reduce travel and potentially reduce demand for oil.
Some estimates on the future of oil prices are not good. The OPEC oil cartel is predicting oil prices much higher through 2023.
“Rising oil prices are here to stay according to JPMorgan, with the bank estimating that Brent prices could hit $150/bl in 2023 as the OPEC+ cartel control supply and defend higher prices,” Matthew Fox wrote for Business Insider.
Fox also downplayed any notion that new COVID surges will substantially impact prices.
“And while the Omicron COVID-19 variant put a dent into oil prices on Friday, with investors fearing that potential country lockdowns would reduce travel and therefore lower demand for oil, JPMorgan viewed that price move as an overreaction,” he wrote.
Last Friday, the Biden administration indicated that it would increase the cost to open up oil and gas leasing on public lands. The “Report on the Federal Gas and Oil Leasing Program” by the Interior Department calls for raising the royalty rates for drillers, further restricting where drilling is allowed, which may contribute to rising costs.
The energy industry is unimpressed with the current federal administration’s handling of gas and oil policy. Bethany Blankley, writing for the Center Square, reported that President Joe Biden’s recent plan to release 50 million barrels from the nation’s strategic reserves is going to cost Americans more in the long run.
“It will be released two ways: 18 million barrels will be released over the next several months, which were previously authorized by Congress,” Blankley wrote. “Another 32 million barrels will be released through an exchange that will eventually return to the reserve, costing those who purchase it more money over the long run and increasing gas prices, critics say.”
Andrew M. Lipow, CEO of Houston-based Lipow Oil Associates LLC, told the Center Square the prices are not coming down now because “the release does not get more oil out of the ground, it just moves supply into the near term.”