Tags: gasoline | volatile | spike | 4

Gasoline Prices Seen as Volatile

By John Morgan   |   Wednesday, 06 Feb 2013 08:08 AM

Gasoline prices have been rising for weeks, and they are likely to spike in the months ahead, but Americans are getting used to it, according to Time.

So far this year, the cost of gas is still less than the heights it hit in 2012. The average price per gallon was $4.67 in California as recently as October, with some stations charging more than $5.

Now the average gallon price nationwide is $3.42, according to AAA’s Fuel Gauge Report.

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“In the grand scheme, a short-term seasonal surge in gas prices probably isn’t enough to make drivers bat an eye,” Time stated. “The point is, by now drivers expect rising gas prices, within reason.”

In March 2012, when prices hit all-time highs in some areas for that time of year, drivers did not cut back on shopping, according to retailer data. In fact, most Americans surveyed said they would not change their behavior in any major way unless gas prices exceeded $5 per gallon, according to Time.

“Gasoline prices averaged $3.60 per gallon last year, and we think they’ll average between $3.25 and $3.50 per gallon this year,” Oil Price Information Services’ Robert Gough told the Des Moines Register, according to Time.

Time noted that prices nationwide could spike to $4 per gallon by Memorial Day.

Both crude oil and wholesale gasoline prices have jumped sharply in recent weeks, according to USA Today, and pump prices have already climbed 20 cents or more per gallon in some states.

“California is going to be hit much worse than other states — and those prices come down the chain pretty quick,” predicted Patrick DeHaan, senior energy analyst for GasBuddy.com.

“In 30-plus years, there are virtually no cases where California gas prices did not move up from (late) January to St. Patrick’s Day,” Tom Kloza of the Oil Price Information Service added.

Nationwide, gas prices usually peak before Memorial Day, USA Today reported.

An enduring price run-up is likely not sustainable, according to Richard Soultanian, co-president of energy cost manager NUS Consulting, due to weak consumer demand, rising domestic crude production and shrinking economic activity in Europe.

“There world is pretty well-supplied with oil,” Soulvanian said. “Barring some geopolitical incident, we’re looking at a fairly significant correction in prices somewhere in the first half of the year.”

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