Look Forward to Paying Less at the Pump

by admin on January 8, 2013 · 0 comments

We hope that travelers continue to plan the family road trip to South Dakota, especially now that AAA predicts that gas prices in the coming year should go down. See the recent release issued by AAA.

Today’s (Jan. 8, 2013) national average price for a gallon of regular gasoline is $3.30. As recently as Dec. 20, the nationwide average stood at $3.22. However, after setting new all-time daily records for each calendar day since Aug. 20, the price last Saturday fell below the year-ago national average.  


According to FuelGaugeReport.AAA.com, motorists in six states (Utah, Wyoming, Colorado, Minnesota, Idaho and Oklahoma) currently pay less than $3.00 per gallon at the pump. Only drivers in Hawaii pay more than $4.00 per gallon. The highest average prices in the continental United States are found in California and in the Northeast.


South Dakota’s statewide average today is at $3.112 which is 21 cents lower than one month ago. The most expensive gas in the state today can be found in Philip, $3.532 per gallon. South Dakota’s least expensive gas is in Piedmont, $2.739.


While retail gasoline prices are currently rising at a slower rate than they did to start 2012, the average is pressured higher by crude oil prices that have continued to slowly increase in recent weeks. At yesterday’s close of formal trading on the NYMEX, the price of West Texas Intermediate crude oil settled at $93.19 per barrel, up 10 cents on the day. This is the highest settlement price since Sept. 18, but is still well below the 2012 high of $109.77 per barrel registered on Feb. 24.


Gasoline prices this year will be less expensive than in 2012 as a result of increased domestic oil production and lower demand, according to AAA. The national average price of gasoline should peak at $3.60-$3.80 per gallon barring any significant unanticipated events, which compares to a peak of $3.94 a gallon in 2012.


Gasoline prices should rise steadily through April or early May, but at a slower pace than last year. As is typical for this time of year, prices will rise as a result of seasonal demand increases and in anticipation of the switchover to more expensive summer-blend gasoline. Following a late-spring peak, national price averages should drop during the first half of the summer to as low as $3.20-$3.40 per gallon before rising again in advance of the Gulf Coast hurricane season and the switchover to winter-blend gasoline. Prices should end the year by falling to low or near-low averages for 2013.


Absent significant storms, major wars or production and distribution outages, the single largest factor that will influence gasoline prices in 2013 will be the strength of the U.S. economy. Stronger than expected growth in the economy would result in higher oil and gasoline prices in anticipation of higher consumption, while a weaker than expected economy would drive prices downwards. Inaction by Congress to reach a debt deal in two months also would result in increased concern about the U.S. economy and could lead to lower gasoline prices.


In the first 90 days of 2012, geopolitical tensions with Iran pressured the national price at the pump almost 65 cents higher. Without a similar market moving story to begin 2013, it is likely that the year-over-year discount will widen in the coming months.


A not-for-profit organization, AAA South Dakota serves its 92,200 members across South Dakota with emergency help on the road, auto travel assistance and a wide range of personal insurance, travel, financial and automotive services through branch offices, and the Internet at AAA.com.


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