Analysts expect gas prices below $2 per gallon later this year

Higher oil prices and refinery maintenance have recently pushed up Wichita’s gas prices, but analysts expect the increase to be short-lived.

Gas in Wichita climbed by 12.6 cents a gallon in the past week to an average $2.38 per gallon. That’s according to GasBuddy.com’s weekly survey on Sunday of 185 stations in the area, the results of which were released Monday.

But two analysts expect gas in the Wichita area to fall below $2 by Christmas.

Gas prices in the area were nearly 58 cents lower per gallon than a year ago, but they were nearly 29 cents a gallon higher than a month ago, GasBuddy said.

Wichita prices have fallen from a high of $2.45 on Friday. Gas was available for $2.33 in many places in Wichita on Monday.

Analysts attributed the higher gas prices to rising crude oil prices as well as planned and unplanned maintenance at refineries in the Midwest that constricted the supply of available gasoline. The planned maintenance allows refineries to switch from refining summer-blend gasoline to winter blend.

Jim Hanni, AAA Kansas spokesman, said refineries were busier than normal this summer because of stronger demand for gasoline.

“They were just going full out this summer because … people were traveling a lot more than usual,” Hanni said.

Hanni said federal government data had the Midwest refinery utilization rate at nearly 99 percent until refineries began their planned maintenance. Since maintenance started, the utilization rate has dropped below 80 percent, Hanni added.

“North Dakota, Iowa, Minnesota, Nebraska and Oklahoma led with the largest increases, while areas of the West Coast saw continued relief at the pump,” Patrick DeHaan, GasBuddy senior petroleum analyst, said in a news release. “Some areas of the country are seeing hikes at the gas pump, while others see continued declines.”

DeHaan said because refinery maintenance is largely temporary and there remains an oversupply of oil, his firm is sticking with its forecast of national gasoline prices at $1.98 per gallon by Christmas.

Hanni said AAA is forecasting the national average price of gasoline to fall below $2 a gallon by year’s end.

“It’s a possibility we could get down in that range,” he said of gas prices in the Midwest.

This story was originally published October 12, 2015 at 10:21 AM with the headline "Analysts expect gas prices below $2 per gallon later this year."