Filler up? Gasoline prices have dropped 23 straight days and are likely to fall further.
(Photo: Scott Barbour, Getty Images)
After plummeting to their lowest levels in nearly three years, gasoline prices may be close to hitting a 2013 low. But that's probably about as low as they'll go this year, experts say.
Nationally, the average price for gasoline has inched up to $3.20 a gallon after bottoming at about $3.17 earlier this week. Behind the gains is a three-day spike in wholesale prices, including a 5% jump Thursday. That's already pushed pump prices in some states, such as Michigan, 11 cents higher this week. Benchmark West Texas crude traded at a five-month low early Thursday, to about $92.50 a barrel, before rebounding to close at nearly $94.
Rising wholesale and crude prices may have dashed hopes that retail gas prices could dip below $3 nationally for the first time since 2010. Eight states - including Missouri, with a national low of $2.86 - currently have average prices below $3. But those numbers may be fleeting. More than 20 states reported retail prices rising Thursday.
"There's still a potential for overall prices to move lower, but I don't see a whole lot of downward movement, and we may have already seen the bottom,'' says Patrick DeHaan, senior energy analyst with GasBuddy.com, a price-tracker which had forecast the national average to fall to about $3.15 a gallon by year's end.
Pump prices had fallen 10 straight weeks, and by mid-October, prices averaged $3.47 a gallon. Slumping crude oil prices, a decline in seasonal demand and rising crude oil and and gasoline inventories pushed prices down nearly 9% in the past month.
Gas prices typically bottom in December, and some industry watchers say they could still inch a bit lower.
Ryan Mossman, general manager of FuelQuest, which helps corporate fleets such as UPS and FedEx manage energy use, says overall pump prices might dip to $3.10 a gallon.
"A lot of it has to do with the supply situation, and we're already oversupplied,'' Mossman says.
Rising production, slow economic growth both here and abroad, and easing tensions in the Middle East could keep prices in check in 2014, Mossman says.
The Energy Information Administration reported this week that U.S.crude oil production hit a 24-year high in October and exceeded imports for the first time since February 1995. It expects 2014 gas prices to average $3.39 a gallon, vs. $3.50 this year and $3.63 in 2012.
Even if consumers have seen 2013 lows, they may still feel a bit more flush ahead of the holiday shopping season.
"You definitely see a shift in consumer sentiment when prices go down,'' says Jeff Lenard of the National Association of Convenience Stores, whose members sell about 80% of the nation's gas. "It feels good to see prices lower than what they were. You may see more buying of affordable luxuries.''
Gary Strauss, USA TODAY