Posted in: Gas Prices,
by Patrick DeHaan on Dec 17, 2012 12:00 PM
If past history is any guide for the future, gasoline prices are close to bottoming out for the time being. Gasoline prices have historically risen between Christmas and mid-January, with an average rise of 10c/gallon over the last five years.
Last year, gasoline prices on Christmas were $3.24/gallon, before rising to $3.35/gallon slightly more than two weeks later. The year before last, prices rose from $2.59 on Christmas to $2.74 during the same time frame. While most years saw gasoline prices rise following Christmas, not all years saw increases. One has to go back to 06/07 to see the only drop between Christmas and January 15 of the following year. Back in 2006, prices were $2.33/gal on Christmas before falling to $2.21 on January 15, 2007.
Perhaps the next logical question would be why prices have a tendency to rise going into the New Year? I surmise it is because of year-end inventory movements made by oil refineries. The amount of supply contained in storage facilities historically begins to draw down in the last couple weeks of the year as refineries hunker down and make movements for tax purposes. This also helps their bottom line as the above data shows, with gasoline prices rising between Christmas and the following January 15th six out of the last seven years.
I continue to work on GasBuddy's 2013 gasoline and diesel price forecast, and believe that we may see a slight break versus 2012. To clarify- that doesn't mean we won't set new all time record highs in some areas, but my growing belief is that the yearly average we set in 2012 won't be set anew in 2013, and that would be welcome relief.