Gasoline prices likely will rebound over the next few months and get back above $3 per gallon by May despite the continuing drop in global oil prices, a national analyst predicted Tuesday.
Increased taxes in a few states and an expensive, annual shift to producing summer blends at refineries will fuel the increase in average pump prices, experts from online tracker GasBuddy.com said in the group’s 2015 outlook.
“It’s going to be difficult for Americans to face another springtime spike in gasoline prices but hopefully, when we do see prices climb, it will be much more palatable especially if we see pump prices start with a $2- instead of a $3- for most of the time,” senior petroleum analyst Gregg Laskoski said in the report.
The website predicts an annual, national average of about $2.64 in 2015, above the current average of $2.19 per gallon but well below the prices drivers paid before prices began to tumble last fall. A year ago the national average was $3.32.
Oil prices driving much of the pump price dropped in half because of increased supply from U.S. shale producers, tepid global demand and a decision by exporters such as those in the OPEC cartel to push prices down by maintaining production.
U.S. crude this week fell below $50 for the first time in more than five years. The accelerated drop has sent other stocks down.
“It’s really got people spooked. I do think oil will bottom and the dollar will peak and it’ll get us away from this mini-panic,” Jim Paulsen, chief investment strategist at Wells Capital Management, told Bloomberg News.
GasBuddy analysts acknowledged the volatility, a change in the pricing paradigm and OPEC’s unwillingness to stabilize prices with an increase in production. They predict normal price patterns will bolster gasoline, though.
Virginia and Maryland increased taxes with the new year, the report noted, and Pennsylvania’s wholesale tax on gasoline went up nearly 10 cents a gallon. Refinery work connected to the annual changeover to federally mandated summer gas blends generally adds between 35 and 75 cents to each gallon into May, the report said.
“The potential for springtime spikes is greatest in Illinois and the Great Lakes region,” the report states.
This article was written by DAVID CONTI from The Pittsburgh Tribune-Review and was legally licensed through the NewsCred publisher network.