, Derry, New Hampshire


January 2, 2014

Experts forecast lower gas prices


While 2014 should deliver a more temperate gasoline price background than 2011, 2012, and 2013, GasBuddy analysts see the potential for dramatic price spikes and equally dramatic price plunges.

California, for example, will spend some time near the end of the first quarter above $4 gal. The interior of the country should largely have the greatest insulation against super-spikes.

The likelihood of a late first quarter 2014 rally in prices from winter lows remains quite high. Factors that contribute to a seasonal gasoline rally haven’t changed. February through April tends to see plenty of refinery maintenance ahead of the so-called driving season.

The Northeast is a bit of a new hot spot. There is less North Atlantic refining than in previous years, and imports of gasoline continue to tail off thanks to poor economics in Europe and elsewhere. Super-storm Sandy gave a preview of the region’s vulnerability, and northeastern states now tend to be in the highest quintile of motor fuel pricing.

The Pacific Northwest, on the other hand, is a beneficiary of the U.S. shale boom. Oregon prices for gasoline dipped below $3 a gallon late in 2013 and together with Washington, this geography may fare better than other regions.

The Gulf Coast and portions of the U.S. Southeast represent a mixed bag. Gulf Coast states from Texas through Virginia should see world class refineries supply some of the cheapest wholesale gasoline in the world.

GasBuddy analysts said they would not be surprised to see interior counties in the Carolinas, Georgia, and Virginia feature prices that are 10 cents a gallon lower than coastal areas.

The final numbers for U.S. gasoline consumption won’t be delivered by the Energy Information Administration until February, but 2013 may indeed have seen a small rise in demand, which would be the first annual increase since the peak demand year of 2007. For perspective, gasoline demand averaged 390 million gallons per day in 2007, compared to 365 million gallons in 2012.

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