(c) Patrick DeHaan
With Christmas just eleven days away, there is a real potential that many areas across the United States and Canada will see their highest ever gasoline prices on December 25.
With many recent events contributing positive sentiment to Wall Street, oil and gasoline futures have surged on hopes the economy is beginning to chug once again. Week-on-week demand vs. a year ago is showing healthy gains in the United States, while supply continues to be lower than last year's levels. While supply remains adequate, traders and investors are seemingly only looking at year ago levels and investing based on improvements seen this year.
The U.S. national average has never been over $3/gal on Christmas Day, while the Canadian average has never been over 106c/L on the same day.
While it appears prices in Canada will easily beat the record for the highest average price on Christmas, the United States will still need to see prices climb to beat 2007's average on December 25, coming in at $2.976/gal. This morning's average was $2.97 and has since moved to $2.977/gal, so at this moment we're there.
If futures continue to climb or find additional traction before the holiday, it seems that a new record will be set for a majority of the United States. Only in a few select cities have prices been higher on Christmas in 2007.
This surely won't be welcome news for many motorists driving to holiday destinations, but I'm hopeful that when February arrives we'll see less pressure on prices as the coldest months generally see the lowest gasoline demand.
Spring 2011, however, is entirely different. Let's not go there for now.