Gasoline prices have continued a downward trend over the past two weeks even though the price of crude oil has begun to rise, as reported by CNN.com. Of course, while prices might be reaching lower price points than summer travelers received, gas prices are still more expensive than prior years. The AAA Daily Fuel Gauge Report indicates the national average for a gallon of regular unleaded gasoline is $3.27, which is still 34 cents higher than a year ago.
Why are gas prices down?
CNN.com also states the decrease is gas prices is a result of reduced demand and a dismal economic environment. FoxBusiness points out that the fall in gas prices is opposite the direction of the price of crude oil. Fox is quick to point out that high unemployment is a major contributing factor to the falling price of gasoline.
Will the price of gas make a rebound?
The Post Standard reports gas prices are expected to rebound as the price of oil begins to recover, and even predicts that prices will start to rise as the end of the 2011 calendar year approaches. Meanwhile an article from Ocala.com points out that as the unemployment rate declines demand for gasoline will increase, which will result in higher prices.
What is happening to the excess supply of gas?
It stands to reason that if demand is falling for gasoline, then a surplus is stored somewhere. An article by CNNMoney indicates that demand for gas has fallen by as much as 10 percent, which has led refineries to begin exporting gasoline, jet fuel and diesel at a rate not seen for quite some time. The Wall Street Journal reported that for the first time in 62 years the U.S. will be a net exporter of petroleum products.
Why are oil prices climbing and could it get more expensive?
The price of crude oil has toyed with crossing the $100 per barrel mark, and the Associated Press is reporting that the price per barrel has situated around $102 currently. That same report indicates that a strong financial plan to handle the debt crisis in Europe is helping to drive oil prices higher; however, CNBC is reporting that trouble in Iran could affect the global oil supply chain, which is something that could drive oil prices even higher. The end result for higher oil prices is higher gas prices, and any supply issue could amplify the effect.
Jason Gallagher is a former travel professional with a decade of experience in the industry. He remains an avid traveler and hotel fan with exposure to technology and trends in properties across the United States.