$5 Gas: Coming Soon to a Pump Near You?

With gas prices on the continual rise and now at a current national average of $3.73 per gallon, the coverage and concern is reaching fever-pitch, leaving many to wonder if we’ll see a $5 gallon anytime soon.

Despite some obvious signs – multilateral sanctions on Iranian crude oil and geopolitical turmoil in other oil producing countries to name a few – that point to “yes,” analysts say the chance of $5 gas is still pretty slim.

“I don’t foresee any situation — even a worsening crisis in Iran — that results in $5 per gallon gas nationally,” said Patrick DeHaan of price-tracker gasbuddy.com. “You’re going to see hot spots … that push prices toward $5, but the national range will be $3.75 to $4.15.”

Phil Flynn, Business Network contributor and oil analyst at PFG Best, agrees adding that we’re getting way ahead of ourselves with all this price per gallon talk.

Flynn points out that the overlooked factor in all this gas talk is the impact of U.S. refinery capacity. It’s been more than a generation since a refinery was built in the United States. According to Flynn the remaining refiners are going into maintenance.

“EPA regulations could close more (refiners),” he says, leading to a glut of crude oil, but a backup in domestic places to turn black gold into gasoline. Flynn also makes reference to the U.S. devaluing currency, a factor which is constantly putting upward pressure on every commodity extant.

Ultimately all oil conversations lead to Iran, of course. Flynn says he’s seeing “the biggest risk premium in the price of oil since 2008.”

If Iran is resolved, we could see an unwind of $20 a gallon in the price of WTI crude and gas prices at the pump under $3 a gallon.

Flynn sees the current crude price action as little more than a run-of-the-mill panic. We’ve seen these things before, he notes.

“When panic passes prices really fall.”

What are your predictions on gas prices for this summer? Do you think the price at the pump will reach $5 per gallon?

via Yahoo! Breakout