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."


More from Money Now

211Comments
Dec 31, 2012 11:39AM
avatar
If the Big one happens,That makes the last one look like a mild down ,meaning everything will drop like a rock. Including the price of gas. They use to give away dishes,if you filled your tank.
Dec 31, 2012 11:25AM
avatar
the speculators are back at it continuously driving up the price you think we would learn after the housing balloon but no they go unregulated and constantly screwing the world up pray that hilary gets to control them she's doing wonderful at her job
Dec 31, 2012 11:24AM
avatar
Filled up yesterday for $2.59 in Denver using the full 10 cent Kroger discount.
Dec 31, 2012 11:07AM
avatar
It's also about the Christmas shopping season. Gas prices go down, so you think you have more money to spend on things you don't really need. Then after the season is over, they can raise prices  on things you can't live without. HAPPY NEW YEAR
Dec 31, 2012 11:06AM
avatar
With the US companies drilling oil from the Bakken formation in the Dakotas daily and enough oil in this one oil pocket to sustain the US for the next 200 yrs,not to mention all the natural gas at our disposal,we and the proceeding 4-5 generations should never have any energy concerns at all.Its utterly insane that we even have to deal w/ OPEC nations that hate us and our way of life.Then we hear how fortunate we our that were not Europe and other parts of the world paying anywhere from $6 to 9 bucks a gallon and having to drive glorified lawnmowers like that stupid Smart car.I don't care how they do things in Europe,if we don't have to why should we pretend we have a limited oil supply just to justify gas prices.I don't know why I'm blessed to be born an american,maybe God has some lottery system or something,but I'm sick of the rest of the world trying to make us feel guilty because our standard of living is so much better.
Dec 31, 2012 11:01AM
avatar
Let's see. Bush was supposed to be in cahoots with Big Oil. Gas was 1.78 when he left. Obama not with Big Oil but prices doubled. I think we got it wrong who is in cahoots with the oil company's.
Dec 31, 2012 10:37AM
avatar

I bet the dumb blonde is the one who ask to use your truck because her she cannot haul nothing with her

pirus.

Dec 31, 2012 10:34AM
avatar
Until we get a president with a pair of testicals like Taft in the early 1900's that stands up to big business that manipulates the market this will be the norm.
Dec 31, 2012 10:31AM
avatar

Gasoline prices are all about manipulation of a captive market. Take big profits then drop prices to give consumers hope. Anytime alternative fuels start to become competition they keep prices artificially low and make alternatives economically unfeasible. Poof, no competition. Market traders take monster profits and the SEC looks confused.

.

Dec 31, 2012 10:22AM
avatar
Gas, Food, groceries, .............all going up and going up fast.  Thank you Mr. President.  Instead of a job, I'll just go find some new moma's to have kids with for my raise in income.
Dec 31, 2012 10:11AM
avatar
HELLO REGGIE 7272  YOU ARE A#1 ...THE BIG DOG HAS PUT THE WORKING PEOPLE OUT OF BUSINESS,,HE SHOULD MOVE TO CHINA WHERE HE BELONGS WITH HIS FRIENDS,,I AM IN FLA FOR THE WINTER AND ALL I SEE HERE IS PEOPLE NOT WORKING CAUSE THEY GET FOOD STAMPS AND GOV.CASH..MUST BE NICE TO KICK BACK AND STOP WORKING SO A THE BEER TRUCKS KEEP ROLLING HERE... 
Dec 31, 2012 10:00AM
avatar

And the Obama Recession continues...and the voters have no one to blame but themselves!

Dec 31, 2012 9:59AM
avatar

I have a boiler heating system that uses #2 heating oil which I just added 125 gallons to my tank and cost me 440.00. 125 gals was the minimum I could buy, this really hurt my pocket book and I am really pissed off that #2 heating oil is the first off the refinery process yet it cost more than a gallon of gasoline. Plus that won't even keep my house warm for the winter! How many people are going to have to choose whether to freeze or go hungry in this country because of these greedy bastards! They are also destroying the trucking industry charging these outrageous prices which seem to always hover around $4.00 a gallon. Some people say I should go to natural gas boiler, yea right! Like I have $6000.00 dollars to spend to convert! Everything keeps going up but our wages yet they expect you to pay immediately and suck it up! Time for a change in Washington, Republicans and Democrats alike! Remember they work for us! They need to be brought down to our level by making them pay their fair share for Insurance,benefits,perks,etc! Boot them out!

Dec 31, 2012 9:57AM
avatar
Gas prices to take off!!!! They NEVER dropped!!!! In Melbourne FL it's been $3.29 for months. 
This is another example of lip service by the government and oil companies!!!!
Dec 31, 2012 9:57AM
avatar
I SURE AM GLAD THAT I KEPT MY 1994 BUICK ROADMASTER THAT GETS 41 MPG..NO NEW JUNK IN MY GARAGE,,,GO REDSKINS
Dec 31, 2012 9:47AM
avatar
oil is used in everything, clothes,commodities,food, you name it meaning it should be a government controlled utility but they dont....we are still driving on "partial combustion" when "total combustion" is simple: turn the timing down to zero, up the spark plug, pump in more air(jets) and you will be getting anywhere from 800-2000mpg with no smog equipment needed but they won't let you have it, everyone should be pumping state and federal representatives demanding "total combustion" engines, mo more smog for a change start breathing fresh air....
avatar
Everyone that puts their money from gas into their pockets have gotten used to having a lot of money in their pockets and want to keep it coming in.  All of the suppliers, stations all the way back to where it comes out of the ground wants to keep the money coming in (as much as possible)  to their pockets.  Either way it is all about the money!  Each one of the suppliers thing their gas is better than the others and can charge more for it because of it. Speculators are paid to get the most bucks out of oil as possible.  They come up with OPEC did this or that and there is going to be a shortage so up goes the prices even though they have an over abundance or glut of gasoline now they still raise the prices. Take away the speculators and the prices will drop back to a normal level.  Everyone wants a larger piece of the pie, even the government.
Dec 31, 2012 8:28AM
avatar

"BTW.....The Military is the 'steel structure' of this Country".....okay, uh, huh.?

 

I guess maybe you should explain "what part" the rest of all the "hard working" Americans are ??

 

Hang in their Fluffy........

Dec 31, 2012 8:21AM
avatar

I suppose that we'll have to blame this on George W. Bush.

 

Welcome to Obamaville.

Dec 31, 2012 7:54AM
avatar
Darren123 is right on.....I said it before and will again; The oil companys want $3.00 a gallon, give or take a few cents...They have pushed it up and down from that figure for years now to see how much we can take but the fact of the matter is, they will go with $2.89 or so in low tax states because $3.79 in Californication and New Yawk will equal it out....They want $3.00 a gallon period....For now...Marcellus gas blowing outta everywhere in the east, oil wells left and right, 30 mpg cars the norm all mean nothing.....
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

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.

Trending NOW

What’s this?

MARKET UPDATE

[BRIEFING.COM] The Nasdaq Composite (+0.5%) and S&P 500 (+0.2%) posted modest gains on Thursday, but not before enduring a morning dip into the red, which took place in reaction to reports indicating Russia has commenced military exercises on the Ukrainian border.

The news from Europe knocked the key indices from their early highs, while giving a boost to safe-haven assets like gold futures (+0.5% to $1290.80/ozt), Treasuries (10-yr yield -1 bps to 2.69%), and the Japanese yen (102.30 ... More

MSN MONEY'S