Gas prices forecast for coming year to be slightly less than 2012
01/12/2013 1:45 PM
01/12/2013 1:45 PM
You can expect to pay a little less for gasoline this year than last, according to recent forecasts by auto club AAA.
Prices nationally are expected to peak at $3.60 to $3.80 per gallon compared with 2012’s $3.94 per gallon, said James Hanni, AAA’s public affairs executive vice president.
“We’re doing pretty good compared to where we’ve been,” Hanni said.
Because of lower overall demand and increased domestic oil production, prices nationally are expected to dip as low as $3.20 per gallon in the coming year.
Due to the increasing popularity of fuel-efficient cars, combined with price increases over the past few years, people are cutting back on their gas usage, causing a lower overall demand for the fuel, analysts say.
For James Williams, energy economist and owner of WTRG Economics based in Arkansas, the dip in gas prices is concerning.
“It’s a year of uncertainty,” Williams said. “The things that drive prices down are things we typically don’t want to see.”
Gasoline prices usually go up in a booming economy and go down when the economy is weak, he said.
“This is clearly the weakest recovery we’ve seen in the post-World War II era,” Williams said. “When you see low gas consumption, one of the things that says to me is that people are watching their spending. You would expect there to be an improvement in gasoline consumption, not the other way around.”
For Wichitans used to paying high prices for gasoline, a change would be welcome.
Last year, gas prices peaked around $3.79 per gallon in late September.
Gas prices began dropping since then and that trend is expected to continue, Hanni said. The current average in Wichita is $2.99 per gallon as of Saturday, a few cents cheaper than it was a year ago, at $3.09, according to AAA’s Fuel Gauge Report.
The Department of Energy is predicting that nationally, gasoline will average $3.44 per gallon in this year, five percent less than it was in 2012. It found that prices averaged $3.63 per gallon for regular unleaded last year.
Of course, all of these projections are subject to change in case of a supply disruption overseas or a natural disaster at home, Williams said.
“The biggest risk to the consumer is another supply disruption in the Middle East or Venezuela, and that stuff is unpredictable,” Williams said.
The state of Kansas has been upping its oil production recently, as the Oklahoma City-based SandRidge Energy has been expanding its southern Kansas operations. By the end of 2014, the company expects to have 55 rigs in the area.
“There’s considerable oil exploration down there,” Williams said. “That’s a plus for your state.”
AAA predicts gasoline prices will rise steadily, peaking in April and early May before falling in the early summer months. Prices are expected to rise again before the Gulf Coast hurricane season around August to October, before falling to close the year.