Analysts expect gas prices to keep falling

1/20/2014

By KELTON BROOKS

By KELTON BROOKS

kbrooks@gctelegram.com

The national average for gas prices has dipped in the last two years, and that trend is expected to continue in 2014, according to Patrick Dehaan, GasBuddy.com senior petroleum analyst.

According to GasBuddy.com, the current national average for unleaded gas is $3.27 per gallon. In 2013, the national average was $3.49 per gallon, making the past year the least expensive one to fill up since 2010. In 2012, pump prices averaged $3.60 per gallon, the highest ever recorded, Dehaan said.

Gas prices in 2011 ranked as the second highest at $3.51 per gallon, while 2013 holds the rank of third most expensive, according to GasBuddy.com.

The average price in Kansas currenlty is 17 cents less than the national average at $3.10 per gallon.

As of Monday, AAA Fuel Price Finder had the lowest gas price in Garden City at $2.97, the average at $3.08 and the highest at $3.16.

"2014 should be less painful at the pump than recent years. Prices should remain low for the next two to three weeks, but it's hard to tell. You can't rule anything out with gas prices," Dehaan said.

Although, Dehaan also added that as February approaches, the most recent drops will likely reverse as refineries begin their maintenance season. Refineries will be doing critical work preparing for summer — which comes at the expense of gasoline output. That will be a contributing factor in an upward rise in gas prices.

Around late March, Dehaan warned of a more noticeable uptick — perhaps as high as $3.70 per gallon.

According to AAA, gas prices across much of the country have dropped primarily because a span of record-breaking low temperatures has contributed to a decrease in demand.

The Energy Information Administration noted that U.S. crude oil stocks dropped by 7.7 million barrels last week to 350.2 million barrels. A weak import level for crude oil inventories of more than 1 million barrels per day to 6.9 million barrels per day was likely the largest culprit in that drop. The EIA reported that gasoline stocks increased by 6.2 million barrels to 233.1 million barrels. Gasoline demand last week was expected to be low, but it could be described as poor at just more than 8 million barrels per day. It was the weakest gasoline demand figure in a little over a year, according to the EIA.

It has been more than a decade since gasoline demand fell below the 8 million barrel threshold.

"The most common reason for the drop was the sub-zero temperatures that caused issues with oil refineries," said Betty Oliva, AAA club spokesperson. "As refineries switch from the winter blend to the summer blend, the demand will increase, as the summer brings more travel demands. Right now in Garden City, some prices are just under $3 a gallon. So everything is good right now."

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