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Pain at the pump: Have gas prices peaked for 2013?

Pain at the pump: Have gas prices peaked for 2013? thumbnail

The pain at the gas pump that you’ve been feeling may not hurt as much the rest of the year.

After surging nearly 60 cents a gallon from late December to a recent peak of $3.79 on Feb. 27, prices have fallen for 25 of the past 29 days. Nationally, regular grade gas averages $3.65 a gallon — about 26 cents below year-ago levels.

The month-long drop has come at a time when gasoline prices typically climb, prompting some industry forecasters to rethink early 2013 estimates of $4 a gallon or higher by the peak summer driving season.

With the oil-rich Middle East relatively stable, U.S. refineries relatively problem-free, domestic production rising and consumers using less gasoline, prices may have peaked. Patrick DeHaan, senior petroleum analyst for price tracker, now expects average prices to peak at $3.64 to $3.69, versus the $3.95 he predicted in January.

“I just don’t see a run-up to $4 this year,” DeHaan says. GasBuddy monitors prices in 166 cities. Prices have fallen in all of them.

Relief at the pump could energize lackluster consumer spending, says Chris Christopher, director of consumer economics at IHS Global Insight.

“Even though the amount people spend on gas is usually less than 5% of disposable income, gas prices have an undue influence on consumer mood,” Christopher says. “And while it won’t make up the difference in the expired payroll tax, it will help offset the impact and give people a bit more spending power.”

Some energy analysts aren’t quite ready to call February’s top the peak for the year, but they doubt prices will climb substantially. Benchmark West Texas Intermediate crude oil recently broke out of a tight month-long trading range. It currently trades at about $97.08 a barrel, a six-week high, but still about $10 a barrel less than year-ago levels.

The Energy Information Administration says monthly U.S. crude oil production is on an annual pace to exceed crude oil imports for the first time since early 1995. And refineries are churning out supplies at two-month highs.

“April has the potential to deliver some surprises and updrafts,” says Tom Kloza, chief oil analyst with the Oil Price Information Service. “The coast is not yet clear for a 2013 top, but it was always nonsense to suggest prices from $4.25 to $5 a gallon. That won’t happen unless there is disruption in the Mideast.”

Despite the month-long drop, the year’s early price surge will push the first-quarter price average to about $3.58, about 4 cents higher than 2012’s first quarter, Kloza says.

Kloza urges consumers to shop around.

“The range in a typical market is 30 to 40 cents a gallon,” Kloza says. “But the difference between the cheapest and most expensive gas in many markets is more than $1 a gallon. So any consumers who buy based on price have seen some nice rewards.”

ABC News at 10

5 Comments on "Pain at the pump: Have gas prices peaked for 2013?"

  1. Cloud9 on Fri, 29th Mar 2013 2:04 pm 

    Demand destruction rears its ugly head again. Meanwhile the contraction takes us down another stair step.

  2. Plantagenet on Fri, 29th Mar 2013 4:07 pm 

    Gas prices almost always go UP during the “summer driving season”. Even in this lousy economic recovery people will drive more in the summer. Maybe they won’t this year—-but I wouldn’t count on it.

  3. DC on Fri, 29th Mar 2013 4:49 pm 

    RoFL! poor amerikans, still bitching and moaning endlessly about the price of toxic-fuel going up a nickel. Maybe obsessing over the low price of amerikan fuel is a way to distract them form the soupy air, fouled waterways and asthmatic children and seniors that are the real result from burning all the subsidized gas. Maybe. But US ‘local’ news never seems to love the ‘pain at the pump’ trope. Maybe its the 21st c replacment for ‘Fire dept. rescue cat in tree stories’.

    Here price is pushing $6.03 (gallon imp.). Despite that, and high taxes on the crap, the country still runs big deficits, nor has the price resulted in any noticeable slacking on the # of gas-burning trash bins on there way to wall-mart to save 25 cents on a gallon of milk.

    Thinks we need that $10.00 a gallon fuel more than ever…

  4. GregT on Fri, 29th Mar 2013 8:10 pm 

    Vancouver BC- $6.31/imp gal and we are being told that we could see $7.75 by the summer. I guess we’ll just have to wait and see……………

  5. BillT on Sat, 30th Mar 2013 2:45 am 

    I agree DC. $10 gas would do more to make people cut back than any other means. And it needs to happen soon. There is no pain at the pump. That is pure hype to distract the sheeple from the coming sheering and butchering from the collapse of the dollar.

    Gas here in the Philippines is about $5 per gallon and has been for over 5 years. But then, it is not wasted driving to Walmart in a 3 ton SUV for a pack of Twinkies.

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