- ISIL creates all-female brigade to terrorize women into following Sharia law
- ISTOOK: Obama wants to be impeached
- Obama to Latin leaders: Help with border
- Military bans troops from Baptist church event honoring ‘God’s Rescue Squad’
- ‘Pocket drones’: U.S. Army developing tiny surveillance tools for the next big war
- Belgian cafe posts sign: Dogs allowed, but Jews stay out
- Gen. Dempsey: Pentagon studying Russian readiness plans not viewed ‘for 20 years’
- John McCain: Botched, two-hour execution of murderer is ‘torture’
- House GOP ready to move border bill
- Bomb squad called after live WWII artillery washes on Cape Cod beach
Experts forecast relief for gas pains
Pump prices expected to fall
Question of the Day
People planning their summer vacations will be relieved to know that top energy experts think regular gas prices have peaked for the year a hair above $4 a gallon.
High gas prices have been the top consumer complaint this year, and they have been zapping growth in consumer spending and the economy overall.
But relief appears to be on the way — albeit with a lagged effect owing to the threat of flooding in critical refineries along the Mississippi River. Some analysts say average pump prices could retreat by as much as 25 cents, thanks to a rout in global markets that has sent oil prices plunging to well below $100 a barrel.
“While we are not out of the woods, most experts seem to think we may have hit the peak,” said Frank Maisano, an energy consultant.
He noted that gasoline-price guru Trilby Lundberg predicted an 8- to 12-cent drop even before oil and wholesale gasoline prices tanked in global commodity markets in the last week on evidence that U.S. and global consumers are curbing their purchases of fuel because of high prices.
Ms. Lundbergs spot-checks around the country suggest the U.S. average pump price got to a likely peak of $4.01 around May 4 before the rout that took premium crude prices down from more than $114 a barrel to $98 in New York trading Thursday.
Now, Ms. Lundberg says she expects a decline of 12 cents or “far more” before Memorial Day if the drop in crude prices is sustained. That would mean the peak price this year would fall 10 cents short of the all-time high of $4.11 set in 2008.
Other reports, such as the weekly U.S. Energy Information Administration survey, put the current average gas price at $3.97 for the week that ended Monday.
Wholesale gasoline prices — the prices charged by refineries and paid by gas stations — have plunged in tandem with the drop of more than 15 percent in crude prices in the past week. Unbranded pump prices are already down by 21 cents.
Gasoline-futures prices experienced a particularly sharp fall of 8 percent in New York trading Wednesday after a report from the U.S. Energy Department showed that Americans have cut back on their driving, causing an unusual 2.4 percent drop in demand for fuel.
Summer is the peak season for driving in the U.S., and gas prices usually rise during the spring as refineries are gearing up, purchasing crude oil and increasing their output to accommodate the need for more gas. Also adding to prices each spring and summer, stringent environmental regulations require refiners to subject summer fuel blends to extra purification processes to avoid air-pollution problems.
But while a run-up in gas prices is normal before Memorial Day, the rise this year was exacerbated by an explosion of political unrest in the Middle East oil-producing region, which sent crude prices well above $100 a barrel.
Market analyst Ned Brines said the collapse seen in oil prices in the past week hasn’t filtered down to consumers because of worries about critical refineries along the Mississippi River, which is cresting at record flood levels this week.
A large share of the nation’s refining capacity is located on the Mississippi corridor between Baton Rouge, La., and New Orleans.
“The gasoline pressure should be temporary, and if the oil pullback holds, we should begin to see some relief at the pump,” Mr. Brines said.
© Copyright 2014 The Washington Times, LLC. Click here for reprint permission.
About the Author
- Economists see signs of another market bubble
- Crude oil will head north of the border to Canada
- S&P: Boeing to suffer if Ex-Im Bank killed
- U.S. job gains, unemployment dip push markets into record territory
- Unemployment falls to 6.1 percent amid U.S. hiring surge
Latest Blog Entries
TWT Video Picks
President wants everyone but himself to pay more
- 'We're coming for you, Barack Obama': Top U.S. official discloses threat from ISIL terrorists
- NAPOLITANO: What if our democracy is a fraud?
- 'Pocket drones': U.S. Army developing tiny spies for the next big war
- ISTOOK: Obama wants to be impeached
- Ted Nugent loses second casino gig for 'racist remarks'
- Michelle Obama says money in politics is bad, asks donors for 'big, fat check'
- Ohio university quiz implies atheists are naturally smarter than Christians
- Russia shipping sophisticated weapons systems to Ukraine separatists
- EDITORIAL: Detroit's water 'spigot bigots'
- 'Straight White Guy Festival' supposedly set for Ohio park
Obama's biggest White House 'fails'
Celebrities turned politicians
Athletes turned actors
20 gadgets that changed the world
Fighting in Iraq