A month-long, 15% sprint in gasoline prices may have finally been broken, but any relief motorists might feel will likely prove to be short-lived. According to Patrick DeHaan, senior petroleum analyst at GasBuddy.com, the end of the unprecedented 32-day rally may be over, but a giant retreat is unlikely.
"We probably will hold very close to where we are today," DeHaan says in the attached video, pointing out that any respite will likely prove to be shallow and short-lived. "The problem now with gasoline prices as we move forward is that we're close to the beginning of March, which is when we start to transition to summer gasoline."
Officially, GasBuddy reports that the national average pump price for regular went to $3.26 on January 20, before peaking at $3.73 by the end of last week. DeHaan says that we are at a record high for this time of year (i.e., winter driving season), which could send us into the summer refinery ramp-up process at already lofty levels.
Of course, a sudden drop in crude could occur at any time and garner some short-term relief, but drivers need to be careful what they wish for — nothing lowers fuel prices faster than weak economic data (such as Thursday's update reading on Q4 GDP). It's a consumer conundrum if ever there was one, forcing people to choose between cheaper gas or a weaker economy.
"If there is any sort of brakes being applied to this recovery, I think we'll see backtracking," DeHaan says, albeit only by 5 to 10 cents a gallon. Even if that happens, lower prices typically stoke higher demand, which in turn will cut short any dip.
"Bottom line: the national average will remain in the upper $3 range for the next couple months," concludes DeHaan.
