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You Visit Tour. Webb Lion Fountain. June 1 2017. Photo David B. Hollingsworth

ODU Economics Expert Says Gas Prices May Increase

By Noell Saunders

During the holidays, gas prices increased slightly but are now heading in the opposite direction. According to gas data site Gasbuddy, Hampton Roads gas prices are averaging about $2.15 a gallon which is lower than the national average of$2.30 a gallon.

These prices - which are as low as $2 per gallon in some areas like Gloucester County - are normal for this time of year but the question remains, "how long will it last?"

Tim Komarek, an assistant professor of Economics and a fellow at the Center for Economic Analysis and Policy at Old Dominion University, said the good news is we shouldn't anticipate gasoline prices to increase to $4 any time soon, but prices definitely will change.

"We might have some slight increases in the summer as more people are traveling but we shouldn't expect any significant increases or decreases over the next two years, "Komarek said.

The Organization of the Petroleum Exporting Countries' (OPEC) December monthly output report could also have an impact on current gas prices. OPEC recently agreed to cut production which may increase gas prices in 2017. Unpredictable weather-related events could also be a factor.

"There's always some uncertainty the further you go out in time. For example, it's very hard to predict when a hurricane will hit the Gulf of Mexico and disrupt oil supplies or if there will be bottlenecks in refining capacity," Komarek said.

While OPEC is cutting production, the U.S. is increasing oil production, which is likely to keep prices stable. Komarek predicts that the new government's pro-drilling policies will be a plus for the U.S. oil and gas industry.

"There's some uncertainty about the new administration's energy policy. My impression is that the Trump Administration is more likely to deregulate the energy industry in the U.S.," Komarek said.

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