EIA Forecasts Gas Prices Falling Below $4 a Gallon by December

The national average for gas is $4.33 a gallon, more than $1 higher than a year ago, but the U.S. Energy Information Administration's October forecast expects prices to gradually decline and fall below $4 by December, according to Money.com. The agency credits increased refinery production after seasonal maintenance and lower winter gasoline demand with helping inventories rebuild.

Prices have swung sharply this year because of the Iran war, which disrupted oil shipments through the Strait of Hormuz. The national average was $2.98 a gallon before the conflict began Feb. 28, climbed to $4.56 in May, briefly dropped below $4 in June after a tentative U.S.-Iran deal to reopen the strait, then rose back to current levels when that relief didn't hold.

Not everyone expects the same drop. Tom Kloza, chief energy advisor at Gulf Oil, projects the average will land around $4.11 by the end of December and predicts prices will stay above $4 through the midterms. Patrick De Haan, head of petroleum analysis at GasBuddy, declined to offer a year-end number at all, citing ongoing tensions involving Iran and Ukraine-Russia that could push prices either direction, and said this year's prices look likely to stay near record levels.

The EIA itself cautioned its forecast carries "above-average uncertainty," and noted that even as wholesale prices ease, tight gasoline inventories and the lag before savings reach the pump could limit how much relief drivers actually see, with Gulf Coast-supplied regions likely to benefit more than Western states.