Posted in: Gas Prices,
by Patrick DeHaan on Oct 16, 2012 01:49 PM
GasBuddy tries to be among the first to tell you everything. We told you in spring when we thought prices had peaked, and they had indeed done just that, so here we are trying to also give you a heads up: it appears the seasonal decline in gas prices is ready to hit.
Make no mistake, some areas have already seen nice declines in gasoline prices- mainly the Great Lakes, where wholesale gasoline prices are at their lowest since February, when average retail prices were in the $3.30s and $3.40s. If you're in Michigan, Indiana, Ohio, Illinois, Kentucky, or Wisconsin your prices have already started dropping and will continue through this week.
If you're along the West Coast, specifically California, you have my sympathy. Prices just aren't coming down fast enough- but at least they're coming down and not going up. Due to this lagging behavior, prices may continue decreasing everyday or two for the next month or so (at this tepid pace)[end]
The national average so far today is already down over a penny a gallon, and we could easily see the national average drop to the $3.60s in the next week, with it dropping even further after that.
Much of the reason for the drop in wholesale, or spot price, can be attributed to speculative money moving out of the market, as we identified in our Monday blog. Peak consumption season for gasoline is nearing its end, making gasoline more bearish than bullish, and that money is heading into other areas, such as distillates- diesel and heating oil. So while gasoline prices may fall, it may mean diesel and heating oil prices remain at their current levels or even higher.
Either way, for the abundance of Americans who consume gasoline in their primary vehicles, the time has finally come: the drop is gasoline prices is coming.