As part of Yahoo Finance's 2024 Investor Guide, Patrick De Haan, Head of Petroleum Analysis at GasBuddy, joined Yahoo Finance Live to discuss how geopolitical tensions and other factors may impact oil and gas prices looking ahead.

De Haan notes that while gas prices have declined for 13 straight weeks recently, it may be coming to an end. De Haan points out that oil prices have been rising due to attacks disrupting Red Sea shipments and how the Federal Reserve hints at potential 2024 rate cuts helped nudge oil and gas prices a bit higher in the near-term on hopes for rebounding demand.

Looking to 2024, De Haan says a lot of volatility in energy markets right now sets an "expect the unexpected" tone given shaky geopolitics and policy moves that can rapidly shift prices overnight.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video Transcript

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DIANE KING HALL: Well, it looks like Christmas is coming early for drivers at the pump this holiday season. As forecasts show, they can expect to pay $0.80 less per gallon than they did this fall. But as the price of crude fluctuates this week due to global conflict and trade disruptions, will the low prices last?

Here to help us answer that question, we turn to Patrick de Haan from GasBuddy as part of our investor guide to 2024. So can this last, Patrick?

PATRICK DE HAAN: Well, we're already seeing a little bit of a break here, a lull in the decline that's continued 13 weeks. It probably won't make it a full 14 weeks. On some security concerns in the Red Sea as Houthis attack oil tankers and other vessels, we've seen the price of oil rise. In addition, last week's comments by the Fed hinting at potential interest rate declines are likely to spark an increase in demand potentially in the year ahead. And with that, gas prices have bumped up just slightly.

We're showing the national average, which had dipped as low as $3.02 a gallon, according to GasBuddy. Now at about $3.06. Motorists and more states are seeing slight increases ahead of the holidays. The national average now basically on par with where we were last year, but we could see a little bit more increases over the next few days into the holiday and into the close of the new year, or I should say the close of 2023 into the new year.

JOSH LIPTON: And, Patrick, so we're basically on par to where we were last year. But I'm interested how does it compare, how does it stack up, Patrick, to where we were pre-pandemic? I asked because I think a lot of times people, that's kind of what they're basing it to, that's what they're comparing it with.

PATRICK DE HAAN: Yeah. Yeah, we still remain a bit elevated. Although we made a lot of progress this year and kind of returning to some of those norms, we're still a little bit above average. Of course, it was back in 2022, the yearly national average was at its highest. Last year, we saw the yearly national average decline to about $3.99 a gallon.

This year, it's fallen about $0.50 from that to about $3.49. And I'm hopeful that 2024 will continue the trend of falling prices, although it still should be a relatively strong year, I think, for the oil sector. We've seen US domestic oil production continue to increase. In fact, government data today looking at weekly estimates with a re-benchmarking now show the US at record oil production domestically.

DIANE KING HALL: So that makes sense in terms of what we're seeing. In terms of where oil prices are today, there have been some fluctuation. But when you balance out the production, US production with the kind of worries about what's happening in the Red Sea, why does this-- how should consumers be looking at this as they kind of prepare their balance-- their household balance sheet for 2024? What should consumers be baking in terms of gas prices?

PATRICK DE HAAN: Well, obviously, there have been a lot of volatility in prices here in the last couple of years, made worse, exacerbated by Russia's war in Ukraine. And we have geopolitical tensions that are really closing 2023. And it sets the tone for 2024. Expect the unexpected, we don't necessarily know what geopolitical conditions may arise in the year ahead. But situations like China hinting to the United States or essentially telling the US that it will reunify with Taiwan, it's those types of geopolitical situations that could unravel and could cause more risk in the year ahead.

I think consumers will get a 2024 that's a bit more friendly, part of that really due to increases in refining capacity that came online this year, and more of those capacity increases that will continue into the new year as well as a continued transition to more EVs, which has really stifled the growth of gasoline demand. But even comments from the Fed in terms of what they do in the year ahead could set the par for where we see gas prices next year. If the economy expands, we could see prices higher than what we anticipate.