Gas prices could fall in FebruaryPublished 12:11pm Thursday, January 31, 2013
Citizens should see a little relief at the gas pump in the coming weeks.
American Automobile Association, which monitors flucutations in fuel prices with its service the Daily Fuel Gauage Report, says that prices should start dipping in February.
“We usually see a little bit of a price drop during late Janary and most of February,” said Clay Ingram, AAA spokesperson. “Typically these are our lowest demand months. The weather is bad; people aren’t really getting out and about.”
Currently, the national average price per gallon is $3.39, up four cents from one week ago. The increase is part of an 11-day climb in prices. However, the national average is still seven cents cheaper than it was a year ago.
“Last year, things were sort of backwards ¬– prices were going up in February and down in April,” Ingram said. “This year, we are back on track to the normal trend. There are no guarantees, but we are expecting prices to drop between now and March.”
Crude prices are currently at $97 a barrel, Ingram said, which is higher than it should be.
“The whole last year, crude was artificially inflated in large part due to investment,” Ingram said. “It should have been around $70 a barrel for the whole year.”
Ingram said prices this year are still artificially inflated because of speculative investors.
“It’s the end of January – we should be at $60 to $70 a barrel,” Ingram said. “Demand is low and supply is strong.”
Ingram said prices should drop before peaking again on Memorial Day.
“Price goes up with demand,” Ingram said. “Memorial Day starts the summer travel period, which usually makes it the normal peak price point.”
While investors, supply and demand all play a role in the price of fuel, Ingram said there is a consumer element that many are not aware of.
“As motorists, we aren’t doing a good job at price shopping,” Ingram said. “We are all creatures of habit. We pull into a gas station because there’s where we always buy it, and it may be convenient. We need to make a concerted effort to buy the cheapest priced fuel in our normal driving area.”
Ingram said shopping around may only save a few cents in the short-term, but it is the potential for long-term change that makes this behavior pay off.
“If we all participate in this behavior, prices can come down over the long term,” Ingram said. “We have to motivate gas companies to lower prices.”
For more information on fuel pricing trends, visit http://fuelgaugereport.aaa.com.