Wichita gas prices predicted to climb in next few weeks

Take all of your pending road trips now, because the fuel price honeymoon is over.

Gas prices, which began dropping significantly in mid-October – to a low of $1.72 per gallon in Wichita on Jan. 11 – are expected to peak around $2.70 per gallon in the next few weeks, according to predictions from GasBuddy, a national gas price tracking service.

“Really, what drove the price down is just pure economic supply and demand: We had an oversupply, and now that that supply is being used up, economics will tell you gas prices will go up,” said Mike Thornbrugh, a spokesman with QuikTrip.

Throughout February, wholesale gasoline prices across the country increased, on average, 54 cents per gallon, according to GasBuddy.

In Wichita on Friday, gas was averaging about $2.28 per gallon, said Patrick DeHaan, senior petroleum analyst at GasBuddy.

Annually in late January, gas prices increase as a result of the transition from the universally cheaper “winter blend” to “summer blend” fuel, which is more costly to produce, Thornbrugh said. Summer fuel blends require more additives designed to protect the ozone during hotter months, which raises production costs and limits output, sending prices higher.

In addition to typical refinery slowdowns in January, strikes at refineries across the United States are causing an uptick in prices.

Workers from the United Steelworkers union stopped working on Feb. 1 at 12 refineries in California, Texas, Louisiana, Indiana, Kentucky and Ohio. The labor situation had not been resolved as of Friday.

On Feb. 18, an explosion at an Exxon Mobil Corp. refinery in Torrance, Calif., drove gas prices in California up 96 cents per gallon in Los Angeles and 84 cents in San Francisco.

“Even though a lot of people say, ‘How can that affect people in the Heartland?’ it will over time,” Thornbrugh said. “They’re going to have to get (oil) from somebody.”

Gas prices first fell to “bargain basement prices” last autumn when Saudi Arabia’s oil producers began selling their product more cheaply to counter higher production in the United States, DeHaan said.

“They finally took notice of an increase in domestic production here in the United States, and it seemed like the Saudis were trying to undercut U.S. prices,” DeHaan said. “They were dropping prices to increase or regain market share that they had lost.”

Thornbrugh said prices fell for almost 150 consecutive days.

Wichita last had such a drastic drop in price during the recession, when gas fell to $1.59 on Dec. 29, 2008, according to GasBuddy.

“The difference then was the whole economy almost collapsed,” Thornbrugh said. “From 1999 to 2000, it was under a dollar. You see swings where you’ve had drastic gas drops over the years, but it doesn’t happen every year.”

Low gas prices for the past few months were a boon for QuikTrip’s business, Thornbrugh said.

“You have a lot of people that may have already used a quarter tank, didn’t need gas but kept coming in because they didn’t know how low it was going to go,” Thornbrugh said. “When prices, quite frankly, drop as steeply as they did, you have a lot more disposable income than you had.

“You see people more frequently, while they’re filling up, coming inside and buying merchandise they may not have bought when prices were high. From a retail standpoint, when prices fall as steep and as long as they did, it’s good for business.”

GasBuddy estimates prices will peak between $2.50 and $2.70 per gallon in Wichita and then will taper off to the mid-$2 range, DeHaan said.

“It’s one of those deals where everybody loves when it’s going their way and then when it breaks the other way, they’re not happy,” Thornbrugh said.

When prices fell, “it was enjoyable, and I sure didn’t see too many customers that didn’t have a smile on their faces.”

This story was originally published March 1, 2015 at 8:23 PM with the headline "Wichita gas prices predicted to climb in next few weeks."