$4 gas coming this spring, nearing $5 in some cities by summer
Maybe you’ll want to start salting away money for 2012 fuel costs now. Get ready to see $4-a-gallon gasoline in various parts of the U.S. sometime this spring, according to one prediction. Another prediction says that some of the nation’s biggest cities -- such as Chicago, Los Angeles and New York -- will see record Memorial Day averages of $4.55 to $4.95 for a gallon of regular gasoline.
The predictions come from two sources. One is the Oil Price Information Service in New Jersey, which provides the daily averages for the AAA Fuel Gauge Report, using retail receipts from more than 100,000 retail outlets across the U.S.
The other is the annual price outlook from GasBuddy.com, where 300,000 to 400,000 member motorists a day report and post online and through phone apps the highest and lowest local prices they see. There are more than 250 price-posting GasBuddy websites devoted to various towns and cities across the U.S. and Canada.
Tom Kloza, chief oil analyst for the Oil Price Information Service, is predicting a national average of $4.05 a gallon this spring, which would be just short of the Energy Department’s all-time inflation-adjusted record of $4.114 reached in the summer of 2008. California’s average would be higher, he said, adding that he didn’t expect it to hit the state’s record of $4.588 a gallon.
One reason, Kloza said, was that those prices will be built on oil that is significantly more expensive than the commodities trading benchmark West Texas Intermediate crude that is reported every day on the New York Mercantile Exchange (NYMEX).
The NYMEX on Friday, for example had West Texas crude trading at $98.61 a barrel, down 49 cents. But much of the oil the U.S. imports is based on Brent North Sea crude, which was trading at $110.38 per barrel in London. Other sources of U.S. crude are also more expensive, Kloza said.
“The Alaska North Slope oil you rely on in California has been trading at about $10.40 a barrel more than West Texas. Louisiana crude from the Gulf of Mexico has been trading $11 a barrel higher.”
GasBuddy.com is predicting record spring prices in the following cities: Atlanta; Boston; Charlotte, N.C.; Chicago; Columbus, Ohio; Dallas; Detroit; Houston; Jacksonville, Fla.; Los Angeles; Memphis, Tenn.; Miami; Minneapolis; New York; Philadelphia; San Francisco; and Seattle. Los Angeles could see $4.70 a gallon. Chicago could see $4.95 a gallon.
Patrick DeHaan, senior petroleum analyst for GasBuddy.com, said “Motorists who drive a SUV may want to consider calling their banking institution and obtain a credit limit increase so they can afford this summer’s fuel expenses.”
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