As demand for oil weakens, gas prices are declining, with the national average falling below $4 per gallon earlier this month for the first time since March.
But the pullback may be short-lived, one expert cautioned, and prices could rise again before the end of the year.
“We’re in a long-term structural bull market in oil,” Schork Group principal Stephen Schork told Yahoo Finance Live (video above). “By the end of the year, I would suspect that these prices will be back in that $100 to $125 range, which we’ve seen through the first half of this year.”
Schork explained the jump in prices in the final months of the year would be driven in part by the European Union’s looming embargo on Russian oil, which is set to take effect in December.
Russian oil production is expected to drop by about a fifth next year due to the EU’s ban, according to the International Energy Agency (IEA). The agency estimated that 1.3 million barrels per day of crude and 1 million barrels of Russian petroleum products will "have to find new homes."
Despite the call for higher prices early next year, Americans could see more relief in the short term.
Crude oil futures declined on Tuesday, as West Texas Intermediate (CL=F) for September delivery fell 2.9% to $86.45 per barrel as of market close while Brent futures (BZ=F) traded at $92.54 per barrel.
Schork suggested that recession fears have prompted a pullback in oil demand and that these continued concerns could push crude and gasoline prices lower in the early fall.
“I do think we are currently in a recession, and hence why we've seen a tremendous pullback in gasoline demand in the United States," Schork said, adding: "As we go into the shoulder months, September and October, demand will continue to fall off.”
The national average price for gasoline in the U.S. has fallen more than 20% from the record high in June, reaching $3.95 per gallon on Tuesday, according to AAA.
“We're looking at oil prices potentially as low as into the $70 range, contingent upon if we continue to see this massive demand destruction that we're seeing,” Schork said. “I think $3.50 is eminently doable from now until the start of the fall.”
Seana Smith is an anchor with Yahoo Finance. Follow her on Twitter at @SeanaNSmith.