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
Dec 29, 2012 3:17AM
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go ahead raise the pries of Gas as hi as you want to Big Oil company's .You are just going to raise it any way, so let just get it out of the way an go as high as you want to. when it gets to the point i can no longer pay for the gas i will just push my car off the cliff an start walking or ride a bicycle

  When i started Driving Gas was 0.99 cents a Gallon now its  $3.65 a gallon i have seen it as hi as $5.00 + a galleon so why should i give a #^(_^@&! how much Gas is. it all about making the rich man richer an the pore man poorer all this if for is to #%&*@ nothing changes no one will do a thing to stop this you got what you want i woke up to day an guess what I'm pore nothing you won how much Blood do you want for Gas now this is all i have left

Dec 29, 2012 2:46AM
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More lies and **** from this administration and the Federal Reserve!  ****ing vile filth, everyone associated with either of these corrupt entities.
Dec 29, 2012 2:33AM
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High energy prices are the very thing that is a drag on our economy. I believe we should work towards increased oil and gasoline production here in the United States so that prices would be forced to go DOWN, not up. Look, the oil industry was able to make plenty of profits when we were paying around a dollar per gallon for gas. Increased natural gas production here in the U.S. helped bring natural gas prices down. Increased oil production in the U.S. would most likely do the same. This would be a big win for consumers, who would then have more disposable income to spend on other things, which would grow the broader economy.

Dec 29, 2012 12:17AM
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MY ADVICE, DRIVE LESS AND LESS SHOW THESE PEOPLE YOU ARE NOT GOING TO TOLERATE THIS HIGHWAY ROBERY
Dec 29, 2012 12:05AM
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Face it....oil companies will fu_k the american people to make huge profits....I'm 62 years old and i can remember when gas was 15 cents per gallon......it's all about GREED...your grandchildren and theirs will be fu_ked by the oil companies for generations to come.
Dec 28, 2012 11:56PM
Dec 28, 2012 11:45PM
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If we had a solid energy policy to begin with, this wouldn't be much of an issue.  Instead, our fed gov wasted a buttload of taxpayer resources on useless and bankrupt wind, solar and battery companies. 
Dec 28, 2012 11:35PM
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Saudi Arabia stated they needed $55.00 per barrel to be profitable and continue supplies.  It's those IDIOT TRADERS that have driven the prices up!  Everything else is just mumbo jumbo hogwash!!

 

Our government wants to talk fiscal cliff, yet they allow the traders to take money out of the pockets of working Americans.

 

It is time to grow a set America, throw EVERY One of those bums out of their nice comfy political office and make them participate in Social Security and abolish their cushy pensions.

 

It is high time the American people becomes the focus.

Dec 28, 2012 10:16PM
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blow it out your a$$, they're al greedy sobs!
Dec 28, 2012 9:56PM
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Instead of whining about high fuel prices buy energy stocks.
Dec 28, 2012 9:35PM
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His wife buys 900 dollar  party dreses and we go without food or gas, they have their

heads up their asses and don't care about the american people. Hope he doesn't get pecker tracks on his clothes from Joe Biden

Dec 28, 2012 9:34PM
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Supply and demand.... Were using less gas, producing more oil, somehow this equals increased prices..Stupid!
Dec 28, 2012 9:30PM
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our president doesn't care what we have to pay for gas in our cars just to get groceries, because in the past four years he hasn't had to pay out a penny for gasoline. he's off the hoook and we're ****ed !!!!

 

 

 

 

Dec 28, 2012 9:22PM
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This is all a joke. I'm sorry - but it is. Oil companies just wanna give you a tease and then squeeze your balls as hard as they possibly can. It's just another scheme/scam like every other huge business in the world. They charge you that much for gas because THEY CAN and they know that you WILL pay for it. Claim that it sucks all you want - each and every one of you will still get into your gas-guzzling pickup trucks/SUVs and put the dime in their pocket.

Wanna make oil prices drop for good? STOP DRIVING. BUY SMALL CARS! Don't have 3-4 kids that play hockey? DON'T BUY AN SUV. Just need to cart your laptop/books and groceries in your vehicle? GET A SMALL CAR NOT A TRUCK!

The less we depend on the oil companies they will realize that their tactics are no longer working. They'll have surplus - and when people know that demand is lower but the price isn't dropping - stuff gets bad.

But that's the funny part...not enough people are willing to give up their 4x4 extended cab pickups or their Escalades in lieu of something more practical. Consumerism will destroy us. It's already begun. Ages ago.
Dec 28, 2012 9:13PM
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hOW CAN YOU MAKE 100 comments on the cost of gas...??

I thought it has been down for a few weeks ??

 

Probably due to go up...

Dec 28, 2012 9:12PM
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How come the article doesn't cite the real reason? The Fed printing money at a breakneck pace. Ben Bernake is creating inflation and he does not care how high food and fuel go up. He will continue to trash the dollar and we will all be paying for it. The Fed sucks!!!!!!!!!!!!!!!!!!!!
Dec 28, 2012 8:57PM
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This guy and many other authors are brain washing us into believing that this is inevitable. We can do something about it. Boycott one of the large companies, i.e., Shell, Exxon, Mobile, take your pick. Tell your friends, family, anyone who listens to stop buying from one particular company. Let's see what would happen to the extra inventory?

This has do be a collective effort.
Dec 28, 2012 8:55PM
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I say s.c.r.e.w. it!!!!!  May the stock market crash and burn..........I ready for it.  There is no reason or gas prices to be this high as the price of light sweet crude is the same price when gas was $1.50 - $1.70 per gallon.  refining costs have increased, but not to the extent of doubled the price.  That is why I say burn baby burn............
Dec 28, 2012 8:04PM
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Why not? Everything else will go up and up and up! Obama might just win this round. The GOP will re-group and come back with a vengeance. We as American cannot let this man kill our country. We all have to stand up for the Red White And Blue.
Dec 28, 2012 8:03PM
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This article is just another example of someone in collusion with Big Oil. It is articles such as these during times when oil prices are dropping to spark activity to cause the prices to climb again. If anything, the thought that families incomes will soon decrease and with less money to spend on dining out or vacations would only equate to a fall in demand and subsequent drop in oil prices.
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