Has the unchecked cost of fuel forced you to dial back on your road time? Well, don’t hold your breath, but you may be catching a break soon. Some industry analysts are saying that gas prices have peaked and will soon be falling.
Average $3.92 per gallon
The national average price of gas on Wednesday was $3.92 per gallon, the same as last week. However, it has not gone up, as it has in recent weeks. The price seems to be leveling below the 4$ and $5 marks predicted by some and 2008′s record average cost of $4.11.
Patrick DeHaan, an analyst at gasbuddy.com, said prices may fall to $3.72 by May:
“By the behavior of the market, things are just running out of steam. Barring any major event — refinery problems, Iran –
I think prices have peaked.”
Costs falling in pricey markets
Pump prices have already started to drop — by 12 to 20 cents — in some to the nation’s most expensive markets, such as
Los Angeles and Chicago.
Brian Milne, an energy expert with the global information technology company Telvent, told USA Today that the slowing
global economy should keep gas prices down, at least in the short term. He also pointed out that oil imports to China have
dropped by 6 percent.
Iran at table, supplies glutted
The cost of crude oil in the Middle East has slumped, due partly to Iran’s agreement to continue talks on its nuclear
program. Plus, reserves in the U.S. are seeing a glut due to reduced demand; a reduction that was driven by the high prices.
Saudis agree to take slack
Gas-tracker Trilby Lundberg also said it is confident that prices are on their way south:
“Even if demand were to surge, we have flush supplies, a lot of refining capacity and repeated assurances that Saudi Arabia would step in and hike production if there are problems with Iran.”
Expecting the unexpected
Although it is never wise to rule out the unexpected in such a volatile industry, all signs seem to indicate that gas prices
have peaked for the season. However, the Federal Energy Administration, perhaps erring on the side of caution, continues to
predict a peak of $4.01 in May.
Tim Evans of Citigroup, however, says there is not yet sufficient data for a thorough analysis:
“The question is whether [the slowing prices] simply reflect end-of-the-quarter profit-taking or whether it signals a more significant change in market sentiment. There isn’t enough data to say for sure.”
So, only time will tell. But for now, enjoy the road and the lowering fuel prices.