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.
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."
More from Money Now
How does a state succeed from Washington DC?? Let the SOBs fend for them selves
I’m tired of being a victim of Obamas and Hairy Reads pawnsie schemes
The answer is simple, get a car that gets good gas mileage.Why do people keep buying
cars and trucks that get horrible gas mileage.Every 18 months gas jumps.It`s called
GREED.Don`t people ever learn?
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
[BRIEFING.COM] The stock market ended the Wednesday session on a mixed note with small caps displaying relative strength. The Nasdaq Composite (+0.5%) and Russell 2000 (+0.4%) registered modest gains, while the Dow Jones Industrial Average (-0.2%) and S&P 500 (+0.01%) underperformed.
Despite the mixed finish, the key indices traded higher across the board at the start of the session after the advance reading of second quarter GDP surpassed estimates (4.0% versus Briefing.com ... More
More Market News
3 stocks will be in the spotlight Thursday as investors try to make sense of the numbers from the sector.
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'