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Tag Archive | "Patrick DeHaan"

GasBuddy Warns 2018 gas prices to be highest since 2014 


 

Motorists will be digging a bit deeper for the second straight year as the yearly national average price for gas will rise 19 cents versus last year to $2.57 per gallon, the highest since 2014, according to the 2018 Fuel Price Outlook released Wednesday by GasBuddy.

Some highlights from GasBuddy’s 2018 Fuel Price Outlook include: 

  • The nation’s yearly gasoline bill will rise to $364.6 billion dollars, some $25 billion higher than what motorists spent last year as the average household sees their yearly gasoline bill rise to $1,898, up from $1,765 in 2017. Compared to 2016, motorists will be shelling out $62 billion more during the year, enough to buy a fleet of 670 Boeing 737s. 
  • GasBuddy’s forecast does not expect any record-breaking prices to be set in 2018, and most of the country will see prices peak under $3 per gallon, but unexpected disruptions could push the national average close to $3. 
  • Metro areas including Chicago, Los Angeles, New York City, Sacramento, San Francisco, Seattle, and Washington D.C. will likely see prices eclipse $3 per gallon. Cities such as Cleveland, Detroit, Miami, Minneapolis, Orlando, St. Louis and Tampa may get within arm’s reach of such prices. 
  • How accurate have past forecasts been? In 2017, the forecast called for a yearly national average of $2.49. Actual: $2.39. In 2016, the forecast called for a yearly national average of $2.28. Actual: $2.12. 

 “Many will be quick to ask why we’re expecting higher prices. Ultimately, OPEC bears much of the responsibility for cutting oil production, leading oil inventories to begin 2018 nearly 50 million barrels lower than a year ago. Yet, understanding many factors, including OPEC, fuel taxes, the economy and their impact on supply and demand is integral to providing a thorough and balanced outlook on gas prices for 2018,” said Patrick DeHaan, head of petroleum analysis at GasBuddy. “Even one event can completely change trajectory of fuel prices for months. Look what impact Hurricane Harvey and Irma had on gas prices and availability. No one could have expected the unexpected, but still, our forecast was less than a dime away from being spot on.” 

 “While gasoline prices overall remain affordable, one aspect that continues to worsen is the gap between what stations are charging. It’s become nothing short of crazy how one station might sell gasoline 20-40 cents lower or higher than a nearby competitor. In addition to GasBuddy data showing spreads have risen to record levels, I’ve heard hundreds of complaints of motorists who get stuck at the pricier station, drive down the street and see it far cheaper. Always shop around when filling your tank. We spend thousands of dollars a year filling the tank; a dime or quarter per gallon adds up to hundreds of dollars,” he said.

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Labor Day wraps up cheapest summer at pump in 12 years


 

N-GasPrices-chart$18.9 billion saved 

With summer drawing to a close, motorists have enjoyed the cheapest summer at the pump since 2004, saving $18.9 billion over its duration versus last summer, a sweet note as they take to the roads to celebrate Labor Day.

“As the holiday approaches, it’s true that gasoline prices have risen across the country due in part to rumors of production cuts from OPEC which could begin to correct the balance of supply and demand, but take note—it could be just the third time in a decade prices are rising ahead of Labor Day,” said Patrick DeHaan, senior petroleum analyst for GasBuddy. “While today’s trend may lead to some frustration, gas prices are likely to soon revert, leaving behind what has been the cheapest summer at the pump in over a decade.”

According to GasBuddy analysts, gasoline prices have remained low even in light of high gasoline demand due to rampant oil production, leading supply to outpace demand for several years, causing oil inventories to bulge and depressing oil prices.

In addition, as U.S. production has increased over the last several years, oil producing countries have been fighting to win back market share. Saudi Arabia was a key player in driving oil prices down by announcing a new strategy to pump as much as they could late in 2014. The downturn accelerated when sanctions on Iran were eased, leading Iran to boost production and fight for market share against Saudi Arabia and the United States.

The U.S. national average for a gallon of gasoline is likely to close out the summer driving season having averaged $2.24 per gallon compared to 2015’s summer average of $2.70 per gallon. For Labor Day, GasBuddy expects the national average to be $2.19 per gallon, a slight decrease versus the current national average of $2.21 per gallon and far lower than prices during the early part of the decade.

Interestingly, GasBuddy data shows that since 2005, gas prices between the end of August and Labor Day have dropped seven out of ten times, with prices averaging a 2-cent decline. The largest jump was in 2005 when gas prices shot up 20 cents as Hurricane Katrina hit the U.S. and oil rigs in the Gulf.

With the conclusion of Labor Day weekend comes the end of the summer driving season in the world’s largest gasoline consuming country, setting the stage for gasoline demand and prices to fall. In addition, EPA’s summer gasoline requirements end September 15 in much of the nation, opening the door for cheaper winter gasoline to return to pumps—a double whammy of downward pressure just in time for autumn—a yearly trend that’s unfazed by upcoming elections.

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