With Christmas less than a week away, there is a growing likelihood that many areas across the United States and Canada will set new records, having never seen gasoline prices so high on Christmas before- the second year in a row of breaking this record.
While gasoline prices have been moderating since mid-autumn, it won't be enough to drop prices under last year's record high Christmas prices. Demand numbers show that Americans either are feeling the pain from these prices, or are just driving less and don't care. Either way, the Energy Information Administration (EIA) reports that in the last week, demand for gasoline was nearly five percent lower than the same period a year ago, proving that even in a slightly improved economy, gas prices are hurting Americans and Canadians.
The U.S. national average has never been over $3.03/gal on Christmas Day, while the Canadian average has never been over 110c/L on the same day. It appears that the U.S. average will be close to $3.20 and the Canadian average near 116c/L, blowing previous records out of the water by over 15c/gal and 6c/L.
These high prices set the stage for what could be a painful 2012. Since 2004, average gasoline prices have risen a whopping 93 cents per gallon from their Christmas season levels by the time prices peak. If the average gain holds true in 2012, that would mean prices could peak over $4/gal. If prices rose $1.31/gal between Christmas and their peak like in 2005, that would mean a national average of $4.50! Yipes!
Keep in mind these are merely possibilities based on past history. GasBuddy will be unveiling its 2012 forecast in the next few weeks, so stay tuned on where we believe prices are going.