Are gas prices about to take off?

Prices at the pump have been dropping for months. Industry analysts are trying to gauge future movement, but say the 'fiscal cliff' could be a determining factor.

By Bruce Kennedy Dec 28, 2012 2:42PM

Image: Gas prices (Photodisc/SuperStock)Has the easing of prices at the pump been a final holiday present for consumers, or just part of the annual cycle of supply and demand?


Gas prices have been dropping for months. Several cities even reported unleaded gas dipping below $3 per gallon over the holidays, but in recent days the price of gas has been creeping up. The national average for a gallon of unleaded was $3.28 Friday, up from $3.26 Thursday and $3.23 a week ago, according to AAA.


AAA singles out several factors for the decrease in prices this fall and winter: larger gas inventories, lower crude oil prices, less demand for gas during the winter months as well as a switchover to less-expensive winter blends of gasoline. The ongoing economic downturn is also having people think twice about how often they find themselves at the pump.


But prices are due to bottom out sooner or later. And now, with crude oil prices firming and continued political and economic uncertainty, the market is apparently at a crossroads.


"Whether gas prices continue to rise or again turn lower will be impacted by action -- or inaction -- in Washington surrounding the looming 'fiscal cliff,'" said AAA’s Avery Ash in the Association's latest Fuel Gauge Report Overview.


"If a deal is reached before the end-of-year deadline it will likely be seen as positive for the U.S. economy, which could send crude prices and gas prices higher. If a deal is not reached, markets are likely to slump and gas prices could go even lower."


But other observers believe the trend is for gas prices to rebound as they usually do in the new year.

"It's happened six out of the last seven years: The national average has risen between Christmas Day and Jan. 15, and this year there's no reason to believe now that this won't happen again," says petroleum analyst Patrick DeHann in his GasBuddy.com blog.


And you can also throw into that mix new projections by the U.S. Energy Information Administration for 2013 and beyond.


The EIA is expecting greater domestic energy production, particularly of crude oil, to continue -- with overall gas consumption to be lower next year. The a.gency says the introduction of stricter fuel economy standards in new vehicles, along with the increased use of natural gas in heavy-duty vehicles, should also have a lasting impact on gas and other energy sources.


These changes, said EIA Administrator Adam Sieminski in a press release, show how "evolving consumer preferences, improved technology, and economic changes are pushing the nation toward more domestic energy production, greater vehicle efficiency, greater use of clean energy and reduced energy imports."


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209Comments
Jan 2, 2013 2:15PM
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let the market go up alittle and gas jumps again for no reason.write your congressman and women and senators.
Jan 1, 2013 11:39AM
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Those of us not working at the gas companies will be forced to eat bologna while they ( ON US ) can continue to have their steak and lobster. You know the saying, the rich get richer and the poor stay poor.
Jan 1, 2013 9:22AM
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It all about the speculators. They manipulate the market and the bought off congressmen and women and senators and pres and vp let them get by with it. Write to your congressmen and women and senators and make them account for a reason for gas and oil to go up. Make them hold the oil companies accountable for the price increases. If they can sell at $3.00 a gallon around election time then why can they not keep it there?
Jan 1, 2013 9:14AM
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There isn't any reason for crude oil, gas to go up. Only the greed of the oil companies. If people wouldn't get greedy and buy the stock and run it up, excuse me if the big marketeers and stock markets wouldn't speculate and run it up. Its all about the SPECULATORS, ruining the market for all of the people. When the market rises oil and gas prices start running amuck because of the speculators! People if you buy the oil stocks you are cutting your own throat!
Jan 1, 2013 1:49AM
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yep folks the holidays are over gas is gonna go through the roof as usual look for a break in march lol.
Dec 31, 2012 6:04PM
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We know who is driving up gas prices by manipulating the commodities market. Goldman Sachs, Morgan Stanly and one other controll 80% of the oil trades. These same pigs have been getting billions in 0% loans to rob us with our own money. Everyone in Washington Knows this.
Dec 31, 2012 5:45PM
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   Goldman Sachs, Morgan Stanley and one other big bank are controling 80% of oil trades. These pigs are driving up the price of gas and other essentials. Also, they have been getting billions in 0% loans so they are robbing us with our own money. Everyone in power knows this and nothing is done to stop it.

   We are in bad need of a government. This one is almost totally owned. What we have is socialism and welfare for the big rich. Banks, wall street, hedge funds, insurance companies and commodities traders all have much in common. They produce nothing and take mountains. We will force real change or the pigs and their government will soon have us in depression and chaos.

Dec 31, 2012 5:44PM
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When they want to rip us off more and raise prices, they do. And we pay it like always. We're kind of like the puppets being controlled on strings by the ones who dictate the prices. Why do we accept this in the first place? Must remember, there are more indians than chiefs out there. We can control things in a massive way if we ever joined together united as one against oil companies, politics, and everything else associated.
Dec 31, 2012 5:36PM
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would   some body    plez  try and tell  me      why  diesel   being  a  by  prod of  gas    hasnt   droped  and  is  higher  than  gas                             maybe   a  guy  in  tenn  could  tell me      huh

 

Dec 31, 2012 5:29PM
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YEP , he got in and nothing will change....very sad time 4 more years of
Dec 31, 2012 4:44PM
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Only because you idiots mentioned something about it.
Dec 31, 2012 4:04PM
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I figure the price is set by supply and demand, then add an extra 25% because they can.
Dec 31, 2012 3:47PM
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Adjusted for inflation gasoline sells for about what it did in the 1930s. Subtract the taxes that are usually looted by the government and it is a miracalusly low cost resource. Wind costs 8000 times more than nat gas, yet I dont see a public outrage over their tax dollars subsidizing it. 
Dec 31, 2012 3:46PM
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Why not, all the leeches need more money, time to take America back
Dec 31, 2012 3:40PM
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Its funny how uninformed people (and the media) talk about the "billions" in profits that oil companies are making, but you don't realize that these same companies are spending billions to make billions.  People, the average profit margin for the oil and gas industry is 8%!  That's far less than your average car dealer, banking institution, restaurant owner, etc. is profiting.  Before you point a finger at the 'evil' oil industry for  making an 8% profit, look at all of the jobs the oil industry creates and the unusually high amount of capital at risk when the drill bit hits the dirt. 
Dec 31, 2012 3:29PM
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Are you  kidding me...The whole "gas thing" is manipulation, without the orgasm...No happy ending here!

Dec 31, 2012 3:03PM
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Do you think we are so stupid to believe gasoline prices are NOT manipulated?

Dec 31, 2012 3:02PM
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So fuel goes up .5 cents a gallon over a week and now they expect it to, "take off"? On what justification? The story clearly stated that demand is down and production is up. Why would prices go up when there is no demand? I'll tell you the real reason why, Because more than a dollar on every gallon is taxed for your local, state, and federal governments and they need more money now than ever inorder to run their dirty deeds that your unaware of. MSN ran an article a few months ago stating that when fuel drops .20 cents a gallon, it equates to a savings of $2400 a year for consumers. Now if this is true on a drop of twenty cents, how much do you think you spend extra when they keep raising the price fourty or fifty cents over a year? It is obvious that since Obama and both parties can't figure how to fix the budget, they will just make more on existing taxes by raising them slowly and quietly without anyone noticing, ....that is until fuel is no longer affordable. 
Dec 31, 2012 2:40PM
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We are not going over any Fiscal Cliff!  That is well known if you look at past history.  How many times have they cried "gonna shut down the guvymint!" I wish they would.  It would save money!  There was never any "cliff" we were going over.  I am looking for BREAKING NEWS any minute now! There are already "hints" of a deal.  I've been saying for days it would come to a solution.  I call it the FISCAL CLIFF movie of 2012.  It has been well rehearsed and most American voters will rush to the boxoffice(voting place) to buy a ticket (vote) and put these actors and actresses back in their Positions (not jobs) for four more years.  People of America! We are the dumb ones.  Congress is the smart ones.  They are playing us like a fiddle!!!!  Bet they get extra compensation for this extra time too.  Are  you so impressed by the earlh morning scenes and the lights on in the capitol..wow...they are working,aern't they?  How can we be that dumb????
Dec 31, 2012 2:34PM
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Somehow I doubt that the 'fiscal cliff'  has any real bearing on a bunch of Arab oil cartel price fixers.
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