Join the Meeting Place for Moms!
Talk to other moms, share advice, and have fun!

(minimum 6 characters)

News & Politics News & Politics

Gas prices could head lower for summer

Posted by on Apr. 13, 2012 at 8:00 PM
  • 10 Replies
1 mom liked this

Gas prices could head lower for summer

Gene J. Puskar / AP

Gas prices are posted at a gas station in Breezewood, Pa., Gas prices may peak in May and then ease during the summer months.

The recent run-up in oil and gasoline prices may have run its course - for now.

Thanks to easing demand from a slowing global economy and increased production from Saudi Arabia, the oil market is coming off a two-year cycle of tightening supply, according to the International Energy Agency. That's helped snap a 13 percent surge in oil prices since the start of the year.

Much of that run-up was fueled by fears of a cutoff in supplies from Iran, which is the target of U.S. and European sanctions aimed at curbing its nuclear weapons program. Those sanctions have been applied in stages since the start of the year.

But traders may have overreacted to the potential impact of those sanctions, according to Julian Jessop, chief global economist at Capital Economics.

We expect any remaining Iran premium in prices to evaporate soon," he said. "Even if sanctions continue to tighten there is ample evidence that the countries most affected have already been able to find alternative supplies, while Iran is actually having to cut prices in order to sell its oil elsewhere."

There is also a good chance Iran will make the concessions needed to end the standoff, said Jessop.

In the meantime, Saudi Arabian oil officials are striving to make up any supply shortfall. On Friday, oil minister Ali al-Naimi said the kingdom is working with other OPEC members to boost output and keep prices from rising.

"We are seeing a prolonged period of high oil prices," Naimi said in a statement during a visit to Seoul. "We are not happy about it. (Saudi Arabia) is determined to see a lower price and is working towards that goal."

American consumers aren't happy about the run-up in gasoline prices either. Pump prices have shot up 70 cents a gallon on average since bottoming in December. They hit $4 a gallon this month. A 1.7 percent increase in March alone was the biggest driver of a 2.7 percent bump in the consumer price index, compared to last March.

But those higher gasoline prices have been offset by warmer-than-normal weather, which has helped household save on the heating bills. Falling natural gas prices have also helped cut the price of electricity, further easing the strain on household budgets.

Pump prices also look like they've peaked for the season, much as they did last May before falling through the summer months. In its latest forecast, issued this week, the Energy Information Administration said it expects the retail prices of a gallon of regular gasoline to peak in May at $4.01 and then ease to an average of $3.95 a gallon through the summer.

Gasoline prices could fall even further if crude prices continue to ease. Analysts say the outlook for crude prices depends heavily on how much further the global economy slows this year.

The IEA is predicting global oil demand will reach nearly 90 million barrels per day this year, just 800,000 barrels per day more than 2011, based on its prediction that global gross domestic product will rise by 3.3. percent this year.

Some private economist think that growth forecast may be too optimistic, given the ongoing economic slowdown in Europe and recent signs that China's rapid growth continues to slow.

U.S. gasoline demand is also easing as the domestic auto industry enjoys a rebound driven by brisk sales of new models offering higher fuel efficiency. 

by on Apr. 13, 2012 at 8:00 PM
Add your quick reply below:
You must be a member to reply to this post.
Replies (1-10):
4kidz916
by Gold Member on Apr. 13, 2012 at 9:54 PM

We can only hope!!

pj2becca21
by Bronze Member on Apr. 13, 2012 at 9:57 PM

Right!!!!!!!!!! i will beleive it when i see it 

heidimoose134
by Member on Apr. 13, 2012 at 10:20 PM

Prices have been going down here. I think they peaked at $3.89 and when I was driving earlier today I saw it is now down to $3.59. Still not ideal, but better! 

They always threaten that gas will go up to $5 in the summer every darn year. I really don't take that threat seriously. 

momoftwo0406
by on Apr. 13, 2012 at 10:25 PM

I would love to stop paying $4 a gallon filled up today for $55 went and got my moms truck and had to fill that up OMG I could not believe it $120 to fill it up. No wonder my parents are only filling it once a month lol and don't drive it unless they need to haul something. I feel bad for people with trucks that crap sucks

matreshka
by Gold Member on Apr. 14, 2012 at 7:10 AM

Prices are still going up, but they lagged with the rest of the contry's prices.  I really hope they go down.  It is impacting how much I use my car and where I go.  DH has to work today and I was calculating gas into how much a few hours out with LO would cost, and I only drive a hyundai accent.

matreshka
by Gold Member on Apr. 14, 2012 at 7:11 AM

My parents have a truck and suv.  They have been taking a lot less weekend trips.

Quoting momoftwo0406:

I would love to stop paying $4 a gallon filled up today for $55 went and got my moms truck and had to fill that up OMG I could not believe it $120 to fill it up. No wonder my parents are only filling it once a month lol and don't drive it unless they need to haul something. I feel bad for people with trucks that crap sucks


matreshka
by Gold Member on Apr. 14, 2012 at 7:14 AM

This is also a good sign:

We expect any remaining Iran premium in prices to evaporate soon," he said. "Even if sanctions continue to tighten there is ample evidence that the countries most affected have already been able to find alternative supplies, while Iran is actually having to cut prices in order to sell its oil elsewhere."

There is also a good chance Iran will make the concessions needed to end the standoff, said Jessop.

In the meantime, Saudi Arabian oil officials are striving to make up any supply shortfall. On Friday, oil minister Ali al-Naimi said the kingdom is working with other OPEC members to boost output and keep prices from rising.

"We are seeing a prolonged period of high oil prices," Naimi said in a statement during a visit to Seoul. "We are not happy about it. (Saudi Arabia) is determined to see a lower price and is working towards that goal."

im23vaughn
by Bronze Member on Apr. 14, 2012 at 7:09 PM

Gas prices here are falling too.  They were around $3.99 last month. They are sitting at around $3.59 right now. So that's a 0.40 drop so far or 10% drop in gasoline prices.

4kidz916
by Gold Member on Apr. 14, 2012 at 11:27 PM

Wow.  Is it bad to say I would love to see 3.59 now?  It's still at 3.90 here. 

Quoting heidimoose134:

Prices have been going down here. I think they peaked at $3.89 and when I was driving earlier today I saw it is now down to $3.59. Still not ideal, but better! 

They always threaten that gas will go up to $5 in the summer every darn year. I really don't take that threat seriously. 


shortycmlb
by on Apr. 15, 2012 at 2:06 AM

PLEAAASSE! Just bought a Jeep Cherokee (no other vehicle in our price range) and upgraded from a coupe and it is KILLING US!

Add your quick reply below:
You must be a member to reply to this post.
Join the Meeting Place for Moms!
Talk to other moms, share advice, and have fun!

(minimum 6 characters)