The steady fall in the price of gas is almost at an end, experts say. Fuel prices soon will hit bottom, then begin trending upward. However, forecasters predict that gas prices won’t have the same effect on consumer’s wallets as they did in 2011, 2012 and 2013.
Patrick DeHaan, senior petroleum analyst at GasBuddy, a consumer guide to fuel prices that tracks how much customers pay at nearly 130,000 gas stations in the United States and Canada, said where he thought we currently were in the gas price game.
“We’re kind of in the two-minute warning, if this is a football game, in the fourth quarter.”
Gas prices continued falling throughout December, plunging to an average of $2.09 nationally on Sunday morning. Around the country, Wisconsin’s average was $2.14, Georgia’s was $1.95, California was $2.70 and Massachusetts was $2.57, according to AAA’s Daily Fuel Gauge Report.
A shift upward probably will happen sooner rather than later, another analyst said. Tom Kloza, global head of energy analysis at Oil Price Information Service talked about trends when it comes to oil and gas prices.
“I think, most likely, we’re 5 to 10 cents from the bottom. In 30 previous years of watching gasoline futures, they always hit a bottom, generally in November and December, sometimes as late as January. And they bounce higher as you get toward spring training and baseball, things like that. The market always looks ahead. And January, with weather, is always the poorest demand month for gasoline.”
DeHaan agreed that gas prices are probably “very close” to bottoming out, unless crude oil prices continue to decline. He noted the drop in gas prices now has matched the decline in oil prices.
“Prices this time of year are just about always getting close to their lows.”
South Carolina had the nation’s lowest average fuel price last year. Other states on the lower end of prices were Texas, New Mexico, Oklahoma, Louisiana, Alabama, Mississippi, Virginia, Tennessee, Arkansas, Missouri and Kansas according to GasBuddy.
The market’s specifications typically change when spring arrives, which usually makes gasoline more expensive. But U.S. refiners are distributing record amounts of crude and feed stock and likely will soon find they have too much product unless they cut back on production according to Kloza.
“Instinct tells me that a lot of the pessimism and a lot of the very weak fundamentals are already being priced into the market so that there will be a rally and that average prices in 2015 will be higher than they are right now.”
While consumers likely will pay more at the pump this year, those prices will remain sharply below levels seen in 2011, 2012 and 2013, Kloza said.
Oil Price Information Service forecasts a national average of $2.45 per gallon this year, which Kloza said is 90 cents lower than last year’s national average.
[Image via mng interactive]