It's been well documented that gasoline prices have taken a big climb late this summer. Well, there's reason to believe that the rise is nearing and end: summer is nearly over. After you wipe away the tears, and digest that statement, we have some good news. First of all, the areas most impacted by refining issues lately (Great Lakes and West Coast) may start to see prices falling if they haven't already. In fact, Chicago prices may have just peaked in the last 48 hours. California prices are very close to peaking as well.
More good news lies ahead: wholesale gasoline prices, the price gasoline stations pay, has shown sides of subsiding- so stations can start lowering their prices. Add in that summer is nearly over- demand will likely drop off in the next few weeks as kids return to school, vacations wind down, and a change back to winter gasoline, and there's a nice recipe for downward pressure on gasoline prices.
There is some danger yet for the West Coast- if inventories don't build during the autumn, it could set up a painful 2013. Fall is the time of year when inventories begin building as demand wanes, and the buildup is critical to stalling price spikes the following year.
California gasoline prices may drop 5-10c/gal over the next two weeks. Prices in Washington and Oregon may still climb slightly in the next week, before joining California a week after. Prices in the Great Lakes have already started dropping- Michigan, Indiana, Ohio, Wisconsin, Illinois, all seeing prices slowly drop. While the East Coast may see prices rise next week, there is relief lurking after that. Similar for the Gulf Coast. While everyone will see prices move at a different pace, October should see widespread relief.
Gasoline prices historically have bottomed out as we're cutting up a Turkey and thinking about what stores to hit on Black Friday. Then all the money spent on Black Friday is reported in company earnings after that, and prices start their yearly pilgrimage higher. All because of hope of that spending sending the economy soaring.
So while the next week might be a toss up for some regions, as we approach early September, I'm betting on a lower national average than we see today.