Unless you’re driving a Nissan Leaf, you have to pay for gas for you automobile. Next to car insurance, it’s one of the hidden costs of owning a car. But it is really hard to predict what gas prices are going to be as they seem to fluctuate day in and day out. While it’s hard to peek into a crystal ball and try to anticipate gas prices, the volatile situation as of late regarding the price of the pump requires some analysis. Where are we going to be at with gas prices in the summer, when driving by Americans typically hits its peak? Here’s what the experts think.
U.S. Department of Energy
The Department of Energy is forecasting that the average price for a barrel of oil will be $93 per barrel this year, which is $14 higher than in 2010. The current price for a barrel of oil is around $86 which is lower than the average that is expected this year. Translation? Since future gas prices are closely tied to the price of oil and that these numbers are lower than expected, the amount that we pay for fuel is likely to go higher than it has been in 2011 so far.
“The investment bank Morgan Stanley has indicated that U.S. fuel prices will be heavily impacted by consumption from countries experiencing economic growth such as China over the next few years. They are anticipating that half of the current output of oil will need to go to these demands. Basic economic rule: as demand rises, supply weakens causing a resource to get scarcer. When something becomes scarce, the price inevitably goes up – and that includes gasoline.
Okay, enough technical economic data. AAA always forecasts what summer gas prices might be, and they are pretty blunt about the prospects: expect $4 per gallon later on this year. “They’ve steadily gone up through the New Year”, says AAA spokesperson Jessica Brady. The fact that they keep moving further up means the AAA is project even more of a spike as winter weather starts to subside across the nation. “Once we hit spring, you’ll see those prices for crude oil and retail gas prices go up.”
What Can You Do?
Not much. Large companies are able to hedge the expense of high fuel prices by signing futures contracts for prices now. The consumer, however, is left with paying whatever it costs at the pump. You can try to save some money by using a deep discounter like Sam’s Club or Costco to pinch off some of the price. You can also try using technology: GasBuddy is a great resource for pinpointing low prices, and AAA even has a smartphone app for tracking gas prices.