Tags: Gasoline | Prices | crude | oil

Experts: Gasoline Prices May Be Close to Peaking

Friday, 06 April 2012 11:10 AM

Gasoline prices, currently averaging $3.94 a gallon nationwide, are likely close to peaking around $4, not far from the record monthly average of $4.12 in July of 2008, experts say.

Supplies aren't that tight.

"Crude oil inventories are now about 2 percent higher than this time last year. Gasoline inventories are now 3 percent higher than this time last year," Andy Lipow, president of Lipow Oil Associates, tells CNBC.

Editor's Note: Is Obama to Blame For High Gas Prices? Vote in Urgent Poll.

"We’re seeing the return of refineries from maintenance and operating rates and the production of gasoline is increasing," Lipow adds

Refineries often close when oil prices climb too high as it becomes difficult to make money when spending more for oil while selling less fuel because people curtail driving, and those coming back on line due to maintenance can boost supply further.

Other experts agree.

"I think it’s fair to say there’s an emerging consensus that we may be close to a peak price and we should start to see prices decline on gasoline, diesel fuel, finished product and even conceivably on crude oil," says Ben Brockwell, director of data pricing and information services at OPIS, CNBC adds.

Talk is brewing that the White House will tap the country's emergency crude stockpiles, known as the Strategic Petroleum Reserve, to ease prices.

Editor's Note: Is Obama to Blame For High Gas Prices? Vote in Urgent Poll.

But experts say the window to do that is closing fast, as it would take time to get the crude to the refineries, especially with peak driving season beginning Memorial Day fast approaching.

"From the time of the release to the time the oil gets to a refinery and the products to the market is generally about 40 to 45 days," says Charles Ebinger, director of the Energy Security Initiative at the Brookings Institution, according to Reuters.

"If you think it is going to have any downward pressure on gasoline prices, you'd want to do it about now so that the gasoline would be in the market at the peak of the driving season."

Editor's Note: Use This Single Loophole to Pay Zero Taxes in 2012

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