Subject:  Not to worry: gas prices will spike, then fall (but admittedly not much) |
Author:
Opti Mystic
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Date Posted: Sat, May 17, 2008 7:50:32
In reply to:
IDLH
's message, "The way I see it is: if everyone said "F*** 'em" and drove MUCH LESS (with carpooling) the price of gas would start to drop." on Sat, May 17, 2008 7:44:23
Gasoline prices don't have much further to rise this year after jumping more than 60 cents a gallon since mid-February. Typically, gas prices don't start their midyear climb until April or May, in anticipation of the busy summer driving season. But this year's surge came early -- an epidemic of accidents at major oil refineries choked off gas supplies.
The good news for motorists is that the upward price trend is slowing as repair work at stricken refineries progresses at a fast clip. John Kilduff, a senior vice president with energy-trading firm Fimat U.S.A., says refiners are eager to get idled capacity up and running again so they can cash in on a very profitable market. "The [current profit margin] for making gasoline is about $20 a barrel, when even $6 is considered very good," Kilduff points out.
The national average pump price for regular gas will peak at about $4 a gallon around Memorial Day, then hover about 10 cents a gallon below that level during most of June. Expect a bounceback to around $3 just before the July 4th holiday, followed by a gradual descent toward $2.60 a gallon at the end of August.
Truckers and other diesel buyers can expect to pay about $4.10 a gallon by Memorial Day, followed by a slow downward drift to $3.75 a gallon in August. New regulations force refiners to make only low-sulfur diesel, which will keep the price from easing as much as it has in the past over the summer months.
Hurricanes are the leading risk factor in the fuel price outlook. Weather forecasters are predicting a vigorous hurricane season, which is most active August through October. Similarly dire forecasts didn't hold true last year, but the same good fortune can't be guaranteed this time around. Back in 2005, the severe hurricanes that made landfall on the Gulf Coast severely crippled refineries and oil production, leading to sharply higher gasoline prices in September and through much of the fall.
The price of oil, the feedstock for gasoline, is less of a problem in the months ahead. There is little reason to expect a sharp rise in crude, barring a Gulf Coast weather event or a crisis in the Middle East that knocks out key oil installations. For the year, oil will average about $50 a barrel, down $5 from last year, while the national average price for regular gas eases by 15 cents to $3.45 a gallon.
Hope this helps.
Drive carefully and prudently.
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