Back in January, analysts has quite a scare: gas prices were soaring, with no relief in sight. Many predicted we'd see nationwide averages of $5 a gallon before all was said and done -- and in some places, we did.
Today, the outlook is a little brighter. Iran has backed away from its threats to shut down the Strait of Hormuz, and oil prices have dipped below $100 a barrel. The average price for a gallon of regular unleaded is now $3.64, and you -- optimistic, intelligent travel-planner that you are -- fully expect to see that number drop some more before you hit the road on your long-awaited summer vacation.
Don't -- at least, that's what many analysts are saying.
According to CNN and Tom Kloza from the Oil Price Information Service, drivers may see a little fluctuation in gas prices over the next few months, but prices should remain more or less where they are.
True, there are some factors pulling gas prices down, like:
- The aforementioned drop in oil prices (though it usually takes weeks for that to influence prices at the pump).
- A new agreement between Iran and the West on Iran's nuclear program, which should calm tensions and ensure an uninterrupted flow of oil from the Middle East.
- The European economic crisis, which should cut demand overseas and leave North America with a larger supply of gas. (Remember, the U.S. is now a net gas exporter.)
However, there are also factors pushing prices up, namely:
- Increased demand during the travel-heavy summer months.
- The pricier summer gasoline blend, which incorporates costly additives to ensure proper performance.
- The North Atlantic hurricane season, which begins this Friday. Storms entering the Gulf of Mexico can interrupt drilling and exploration activities, which don't affect oil supply so much as send investors an analysts into panics (which probably has more impact on the price of gas than any "real" factors).
All told, those weights and counter-weights should balance out and hold prices steady for the next few months -- or so say the analysts. Of course, these are the same analysts who said we'd hit $5 per gallon, so, you know, take it for what it's worth.
Do you expect gas prices to plummet before you head out on your summer road trip? Drop us a line and tell us why, or leave a note in the comments below.