Low 2012 gas prices will evaporate this year

That early winter break you've been getting at the gasoline pump? It's beginning to show signs of cracking.

Gasolineprices remain below $3 a gallon in at least 50% or more outlets in 14states. But the national average has crept up three cents to $3.30 agallon the past week and 8 cents since hitting a 2012 low of $3.22 inmid-December.

It's likely to get worse in the coming weeks. Crudeoil prices are up about $10 a barrel the past month, with benchmarkWest Texas Intermediate crude closing at $93.09 a barrel Friday,finishing the week up 2.5%.

"The celebration is over,'' saysPatrick DeHaan, senior energy analyst at gasbuddy.com, which operates250 North American price-tracking websites. DeHaan expects prices torise another 35 cents a gallon through early April before peaking atabout $3.95 a gallon. That's on par with 2012's $3.94 peak and but below2008's record $4.11.

Still, DeHaan and the auto club AAA expect2013 gas to average less than $3.60 a gallon, ending a string of recordhigh averages since 2008. Last year, the average price of gas was about$3.61 a gallon, up from $3.52 in 2011.

Despite decreasing demand,last year's prices were impacted by both global oil prices and limitedrefinery capacity. Refinery shutdowns and reduced production inCalifornia, Washington and Illinois caused both regional and nationalwholesale prices to surge before seasonal demand slumped in the fall.Pump prices fell nearly 15% from Sept. 14 to Dec. 22, according the AAA,on falling demand and higher inventories.

DeHaan expects lessvolatility and smaller price hikes in the Midwest and West Coast, butrefinery woes could again plague the market.

"Americans thinkthere should be this magic formula based on oil supplies. But refineriesare the big wildcard," he says. "And even with higher energyproduction, increased fuel efficiency and lower consumption, we stillmay face rising gas prices.''


To find out more about Facebook commenting please read the
Conversation Guidelines and FAQs

Leave a Comment