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Forecasters predict shaky gas prices
Jan 19, 2013 4:00 pm
One round trip between Lebanon and Nashville is about 60 miles.
That number can add up quickly for the many Lebanon residents who have to make that commute five days a week for work. And although trying to predict the final tally at the gas pump for each fill-up can be like trying to predict the weather in Nashville, gas forecasters try to help as much as they can.
Gas prices are inherently volatile because they are dependent on so many varying and complex factors – both global and local - according to Patrick DeHaan and Gregg Laskoski, senior petroleum analysts for Gas Buddy, an organization that tracks and predicts gas prices.
Anything from political coups to refinery problems to severe weather can affect that final price at the pump.
DeHaan and Laskoski predict gas prices will be even more volatile than normal this year.
“Even with increasing energy production in the U.S., declining fuel consumption and improving fuel efficiency, Americans may still face rising gasoline prices in 2013... and that appears to be closely tied to the nation's $16 trillion debt,” said Laskoski.
One of the primary reasons for this increased volatility, according to DeHaan and Laskoski, is the Federal Reserve’s quantitative easing programs. While these programs inject cash into the U.S. economy, they also weaken the value of a dollar.
“When the dollar loses value, crude oil climbs higher, and Americans pay more for gasoline,” said DeHaan and Laskoski.
Another key issue affecting American gas prices is the export of oil and petroleum products.
According to the Energy Information Administration, exports of oil and petroleum products rose 217 percent, as of January, within the past 10 years.
Nearly 3 million barrels are exported every day, according to the EIA.
This reduced supply available for American use raises the prices that can be charged at the pump.
Lastly, aging or poorly maintained refineries can lead to breakdowns or even explosions at the refineries, leading to a host of safety and supply issues. And again, when supply is down, prices are up.
While DeHaan and Laskoski predict volatility throughout the year, they also anticipate certain peak times.
They believe the U.S. will see additional volatility during the following time frames this year:
April 1 through May 15
Refineries begin producing cleaner-burning summer gasoline and perform maintenance during this time frame, and this is also when problems usually happen.
Aug. 1 through Sept. 15
Hurricane season has wreaked havoc to oil infrastructure in the last decade. While there is no way to know for certain what this year’s hurricane season will look like, there remains the possibility that it will continue to wreak havoc. And even if it doesn’t, the threat of it can also raise gas prices.
Oct. 15 through Nov. 15
While less-clean-burning winter gasoline will likely help keep prices in check at the pump during this time frame, this is also the time when refineries are typically maintained. Reduced supply and potential safety issues can bump up prices, although they will still probably be lower than during the other two peak times.Month Lowest Highest Median January $3.21 $3.43 $3.29 February $3.25 $3.52 $3.39 March $3.53 $3.81 $3.67 April $3.80 $4.05 $3.95 May $3.73 $3.94 $3.85 June $3.49 $3.69 $3.60 July $3.63 $3.87 $3.73 August $3.54 $3.78 $3.65 September $3.46 $3.72 $3.58 October $3.29 $3.61 $3.45 November $3.26 $3.54 $3.40 December $3.18 $3.48 $3.33