Posted in: Gas Prices,
by Patrick DeHaan on Dec 3, 2012 12:34 PM
It's the million dollar question as we head towards Christmas and the New Year- how long will the national average continue to drop? Well, to be blunt, we don't know exactly. We can venture a guess, certainly, but to ascertain the exact price of gasoline or how long the drop will last is difficult.
I wasn't a believer that the national average would continue a strong downward drop going into Christmas, and I've backed off on that prediction slightly, saying a national average of $3.25-$3.35/gal is possible by Christmas. And while the average has now fallen under $3.40/gal, its possible that things fizzle out and hold where they are for the time being.
Gasoline prices can undergo an "identity crisis" if you will during this time of year. Speculators, traders, and players are looking for solid signs of economic growth. The holiday retail season holds a significant amount of news to analyze and digest, and some of it may be conflicting, leading gasoline prices to hold somewhat steady. What happens during holiday shopping season 2012 will certainly have an impact on gasoline prices, but it may take until after Christmas to see where the cards fall. Right now, there are initial reports into Black Friday and Cyber Monday sales, but we need a look at the bigger picture.
Either way, Christmas Day 2012 may again set another price record. Last year the national average stood at $3.238 per gallon, and we certainly could break that again this year- in fact, I expect it to be broken.
The fiscal cliff is still on the forefront of my thoughts lately, and with no resolve yet, this may become a more significant impact on the economy and gasoline prices. If there's no fix by January 1, I expect chaos in stock markets and oil prices as well. This is still a big grey area, so we'll have to wait to see what's in store.
For now, we'll continue to see the national average fall slightly. I don't see any big drops or hikes in the next week.