• Feb 10, 2011
Prepare for some more pain at the pump this summer (Sam... Prepare for some more pain at the pump this summer (Sam Felder, Flickr).
What goes up, must come down, said the man. And, usually, the inverse is also true.

It's hard to imagine a better example of these truisms than gasoline prices. As we know, they are volatile, and many factors contribute to their rise and fall, most of them having to do with global economics, but some of them also involving geo-political forces.

Egypt's present political and economic instability is certainly a factor on everyone's radar. Egypt is not a big oil exporter, but if the political turmoil continues and results in a crippling of the nation's infrastructure, it could have an impact on prices. Tankers carrying oil from the largest Middle Eastern oil-producing nations travel through the Suez Canel, and an oil pipeline runs alongside it.

"Speculators are worried about the downside of the events in Egypt," says Tom Kloza, chief oil analyst for the Oil Price Information Service.

As of February 9, the average national price for a gallon of regular-grade gas had gone up by 47 cents in the last 12 months, from $2.64 to $3.11, according to AAA. Analysts and other experts expect prices to be even higher come summer. Some say they'll be up to the $3.50 range from June through September, and the Energy Information Administration announced in January that there was a 10 percent chance that the average price will hit $4 per gallon by the end of the summer.

For those who appreciate symbolism, it's also worth noting that during the Detroit auto show in early January, the New York Times' Nick Bunkley reported that the average U.S. gas price that week was $3.089 per gallon -- its highest price ever during the Detroit show, he noted on Twitter.

"The main factor for the increase in the price of crude over the last year is that there has been a stronger demand for oil and gas in emerging economies like China and India," says Brian Milne, the Refined Fuels Editor and Product Manager for Telvent DTN, a provider of real-time commodity information services. "There has been a much greater demand in those nations for oil. The economies in those nations have continued to grow even as the rest of the world was in recession for a couple of years."

Domestic demand has also increased, as the U.S. economy has continued to recover. Demand will continue to increase as the economy further recovers. "The U.S. demand really does take a back seat to the demand in China and India. We've seen flat demand for gasoline here (due to the recession), but we're now competing with those nations, and the rest of the world, for crude," says Kloza.

Milne projects that prices will likely fall in February, because demand is generally down this time of year, due to people driving less in states with winter weather. But he sees prices heading back up in March, hovering in the $3.20-to-$3.30-per-gallon range through May, and then hitting $3.40 to $3.50 by late summer. "But prices will be higher along the West Coast during the summer. The Energy Information Administration expects West Coast retail prices to be 25 cents higher than the national average during the summer," adds Milne.

Kloza's projections are in the same ballpark. From mid-March until mid-May, we'll see the usual fears about gasoline production, he notes. At some point in what Kloza calls this "petro-noia cycle," during which time winter gasoline formulations get replaced with summer-specific gas, he says, "We're likely to see prices nationally in the $3.25-to-$3.75-per-gallon range."


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  • 17 Comments
      vlady1000
      • 3 Years Ago
      Company pays for all my gas, but I do drive a lot less tha I use to, ride my bike, walk, even hooked the 2 dogs to the sled today and went to the grocery store (they love it) and got about 100lbs of food (50lbs was dog food). I get about 4 miles/ dog treat , have 8 wheel drive, and they always start!!!
      biker616
      • 3 Years Ago
      I hope gas in the states reaches $10 per gallon.
      • 3 Years Ago
      I don't know where they get their gas prices from! We are already paying $3.98 a gallon in Oklahoma, and I know that other states pay more than that! Why, when we have an abundance of natural gas and the technology to use it in our vehicles. Government, get out of our way!
      • 3 Years Ago
      We have the know-how, the technology, and the oil right here in our own country. Why our govt leaders don't do something about it is beyond me. I can only assume they are enjoying the royalities and benefits that the Oil companies pump into their wallets. Here in the US we pay a lot less than most countries around the world, but enuff already. A little over a year ago gas prices went up and our economy tanked. Who won, the Wall Street fat cats, who seem to have strong US political connections...go figure...real americans need to run for office and vote out all the old timers who have been there to long enjoying the fruits of their corruption...
      • 3 Years Ago
      I know my wife and I have taken 2 pay cuts each with more to come and grateful to have continued employment. All the while oil companies are reporting record PROFITS. Where's the justification for continuing to increase gas prices? Let oil companies lose some of those profits like the rest of us.
      • 3 Years Ago
      Where are the Dive Byes (NEWS) when you need them? If Bush was still there, we would know why gas prices are so high! He would stop drilling everywhere, so they would go down, right! But NO, we build cars that are a JOKE!
      • 3 Years Ago
      Who Cares?
      • 3 Years Ago
      EVERYONE REMEMBER when GWB was in office and gasoline prices went up - media WAS ALL OVER IT - now that Obama is in office and prices are SOARING - nothing said. rumor was GWB was in bed with the oil ******* - Obama isnt?????? WE NEED TO START peacefully protesting like other countries do in hopes our gov will "listen to the will of the people" !!!!!
      • 3 Years Ago
      Our Goverment is worse than Communism! ALL lies/LIes Lies
      Jim
      • 3 Years Ago
      Start taking out the investment brokers that are driving up the price of gas. Send the navy seals that took out Bin Laden to Goldman and Sachs main office, let them take out a few of those greedy pigs, maybe the rest of them will get the hint.
      RICH
      • 3 Years Ago
      What are you living under a rock? It's alreadfy $3.71 in the Buffalo NY area
      • 3 Years Ago
      The people in Iran and Egypt had the right idea but the wrong thing to go after. The oil companys and energy people were the ones they should have been protesting.
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