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 31, 2012 7:41AM
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This is by no means an accusation ,however I do wonder If maybe the people in upper positions of our government , and their lobbyists arn't bonofied stock holders in these major Oil companies . And this business with the dairy farmers being hit we could see a gallon of milk at $8.00 a gal.  it seems like our worst enemies or our own leaders, I think if all americans took a break at a crucial time (just like our politicians) and stopped doing anything  like working, paying taxes, driving , and supporting their bad conduct for even a week things would sure change, yes it would hit us hard, but no harder then we are hit now, and it would let them know that we are fed up. We want responsible and fair changes. After all the American people make up this country not just the The Few, The Overproud, and The Corrupt.(no disrespect to the Marines) And by the way our Military is the steel structure of our country.

Dec 31, 2012 7:40AM
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it is what the republicans are doing to our economy, the elephants are such liars and they are running everything that we need, but they will get tired of fighting! say no to republicans, and watch the USA take off and create jobs and fun for all, vacations will resume, and prices will drop and America will be the greatest place on earth, but only if we get rid of boenher and the rest of the elephants, plus we need to get palin a free ride to iran so she can act big and maybe become president of iran!
Dec 31, 2012 7:37AM
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The fiscal cliff is going to hurt, so what the oil companies do, put salt in the wound.
Dec 31, 2012 7:07AM
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In simple words you have no damn idea of what gas prices are going to do.
Dec 31, 2012 6:05AM
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I guess we need the President to issue an executive order or a decree from the throne
Dec 30, 2012 7:23PM
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EVERYTHING IS ALREADY UP NOT JUST GAS! ALL ON OBAMA'S WATCH! BLAME HIM JUST LIKE YOU LIBS BLAMED BUSH! HE'S

DONE MORE DAMANGE WITH REGULATIONS AND TAXES AND FEES AND SHUTTING DOWN CHEAP ENERGY AND LEFT WING

DEMOCRATS AGENDA WHICH IS COMPLETE FAILURE! HE'S WORRIED ABOUT GAY MARRIAGE TODAY INSTEAD OF FIXING

MEDICARE AND SS WITH THE REPUBLICANS SO ALL OUR TAXES ARE GOING UP WHICH IS WHAT HE WANTED AND THEY

WERE GOING UP ANYWAY! NOW THEY WANT TO TAX US ON OUR MILEAGE? PUT DEVICES ON OUR CARS? SOCIALISM!!!!

Dec 30, 2012 3:48PM
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Doesn't matter.  The oil bigshots have a huge Christmas to pay for.   We should be paying .99 cents a gallon for oil!!!!!!
Dec 30, 2012 1:47PM
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I've wondered about the price and cost  recovery on a Tesla, along with maintenance or life of the technology in the car ??...Funny I almost invested in the IPO, but didn't.

 

Within a Generation, I'm sure we could have 10-15% of the E-vechicles on the road, but maybe compressed or liquefied Ngas is a fairly good alternative also....

With prices of the Vechicles coming down we have surmounted the greatest hurdle...

Then applications and availibility of the fuel/E source is another... 

Dec 30, 2012 12:09PM
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Politicians want to keep their jobs, there will be no fiscal cliff. It´s just a bluff.
Dec 30, 2012 12:02PM
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If the fiscal cliff is what it takes to bring gas price down then BRING ON THE FISCAL CLIFF!!! The problem is this is BULL***!!!

My prediction:

Fiscal cliff happens. Gas continue to rise and then economy back into recession.

Dec 30, 2012 11:59AM
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Fastest way to get rich is to lie and rip off the people in a so what legally fashion. That's the scheme with the oil industry. Stop trying to fool people with supply and demand theory.

I'm pretty sure the oil companies pay other group to stir up stories or issues to get gas price to rise. They profit more from making mistakes.

Dec 30, 2012 11:02AM
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I don't care about gas prices any more. I am buying a Tesla Model "S" and the FREE forever 30 min charge is good for 3 hours worth of road time. It is truly an all electric car FINALLY, not that GM half baked piece of junk. So I can go anywhere, any time and any distance. Good bye gas prices........Good bye gas stations....Hello freedom from the Oil monopolies...!!!!  Here is my answer to those oil monopolies and higher gas prices ...STUFF IT UP YOUR TAIL PIPE...!!!
Dec 30, 2012 6:02AM
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Wow, the fiscal cliff has become an excuse to screw everyone. Higher gas, stocks possibly tanking taking the captive 401Ks down to lower levels (that's your retirement guys), Threats of 7 dollar milk ( not from the fiscal cliff but is from the same gridlocked system system). Loss of jobs, new recession etc. etc. etc. Were being sooooo screwed. Ask yourself, who will make money on this mess?

Dec 30, 2012 1:39AM
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Deflation is coming!! Austerity measures, spending cuts will be deflationary. Deflation cannot be avoided after credit inflation runs it's course. Google CONQUER THE CRASH KONDRATIEFF WAVE to understand the problem the world is facing. Great Depression is going to pale in comparison. The bright side? Cheaper gas!

Dec 30, 2012 12:15AM
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I remember a couple of years we went without a raise,a few years back,,,so 1.7% ain't too bad...
Dec 29, 2012 6:28PM
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everyone on s.s. and/or a pension who just got a gigantic 1.7% cola increase thanks to our benevolent represenatives is being played for a chump. that's 1.7% per year at a time when food and gas prices seem to be going up at a 1.7% jump per month. you are all being ripped off. by about 6%. so where is that 6% going? to pay off their spending habits off course. feel better now?

Dec 29, 2012 5:56PM
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I would think supply and demand will dictate the price of fuel.....?

But we will always have the manipulation factor..

 

Some could say we threw millions at wind,solar and lithium battery makers...

But we now have feasible electric vechicles on the road...Competition dropped some battery companies on the scrap pile of hope....Wind power is growing and getting CHEAPER and Solar has slowed but making interesting inroads...

Strangely..The oil and gas companies have made great strides into shale oil/Ngas fields...Hmmm.

 

I remember when we had 2-Lane hi-ways and a lot of dirt roads, someone or people built a huge dam in the desert, The TVA was a pipedream and we spent millions on a damn "snail darter."

At one time we only looked at the moon through a telescope and wondered about the cheese.

And we plowed the fields with horses or mules....Yeah, the damn "good old days." 

Dec 29, 2012 12:26PM
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Gas prices rise or fall just enough to bleed the economy to keep it from becoming strong and just too little to make it collapse.  It reminds me of the horseshoe crabs caught off the Atlantic Coast of Delaware and Maryland which are harvested for their blood, which contains a unique compound used in medical tests.  They only take 25% of each crab's blood so that it has a decent chance to recover so that it can be caught again and partly drained, etc. etc.
Dec 29, 2012 9:14AM
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I MAYBE AN IDIOT BUT I DID NOT VOTE FOR AN IDIOT SO I AM NOT QUITE THE IDIOT YOU MUST BE 

 

Dec 29, 2012 7:35AM
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We went over the cliff as investors. Wall Street has given up more of the gain than what we stood to lose if it was settled or not. The only losers will be investors again.
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