The Cheapest Gas We've Seen in a While: Here's How to Get It
NEW YORK ( MainStreet Travelers who plan on driving to their holiday destinations during the next two weeks may not see much of a reprieve at the pump.
Experts predict that gasoline prices will remain close to where they are now or fall or increase slightly as more drivers are expected to hit the road.
The recent dips in gasoline prices in some parts of the U.S. are a welcome relief, but consumers should not plan on having the low prices stay at the pump since some of the declines only occurred in key regional areas such as the Gulf Coast and Midwest. Gasbuddy.com found that gas fell below $3 a gallon in Arkansas, Kansas, Missouri, Oklahoma, New Mexico and Texas. The average price in the U.S. was $3.21 a gallon with the lowest gas in Oklahoma at $2.87. Gasoline prices averaged $ 3.24 in 2012.
Gasoline prices have fallen the last couple of weeks but are likely to rise slightly headed into Christmas and the New Year, said Ryan Mossman, vice president and general manager of fuel services of Fuelquest, a Houston-based software company that manages supply chain for suppliers and purchasers of fuel.
The decision by the Federal Reserve to taper quantitative easing has been accompanied by rising prices in the wholesale markets, he said.
"Although reducing quantitative easing makes the dollar stronger and it should make oil and gasoline cheaper, the opposite has happened," Mossman said. A stronger economy is likely to reflect stronger gasoline demand and higher prices, he said.
"This coupled with travel organizations like AAA predicting above average travel during the holidays in 2013 put the likelihood of a slight rise to around $3.27 a gallon," Mossman said. "Areas such as the middle part of the country will see much lower prices than that."
Overall, the weekly U.S. average gasoline retail price is now $3.24 per gallon, according to the Energy Information Administration. Crude oil makes up 71% of gasoline prices, taxes contribute 13% and vary by state and the remaining 16% comes from refining, distribution and marketing costs.
Gasoline prices fell by more than 40 cents from the beginning of September through the middle of November. The U.S. weekly gasoline retail price rose by 8 cents per gallon to reach $3.27 per gallon on December 2 because of unplanned refinery maintenance and higher crude oil prices, the EIA said. Last year the annual average regular gasoline retail price was $3.63 per gallon and is expected to average $3.50 per gallon in 2013; predications have it that cost will drop to $3.43 per gallon in 2014.
"I expect holiday gasoline prices to remain about where they are or slightly higher," said Brian Youngberg, a senior energy analyst at Edward Jones in St. Louis. "The Fed announcement has helped push oil prices up slightly and wholesale gasoline prices have followed suit."