It's Monday and time to evaluate last week's prediction for the Weekly Gasoline Price Outlook! Last week I forecasted that average prices would "fall slightly" to $2.79 in the U.S. and 103c/L in Canada. Well, prices did drop, but to $2.80 in the U.S. and to 103.4c/L in Canada. We'll call that very close on the prediction.
This week looks to feature falling prices for the early part of the week (now), but we'll likely see prices rise as the week continues. Economic conditions and a weaker dollar are the two things influencing prices higher so far this week. News of the Fed Reserve buying treasuries is pushing the dollar lower, which pressures oil prices to move higher.
I believe that Midwestern states (MI, OH, IN, MN, KY, a few others) may see a price increase later in the week unless things change quickly. Prices in most of those states could jump 15-25 cents per gallon, but would likely remain under $3 a gallon at this time.
I'm hopeful that the DOE report to be issued Wednesday will show a surge in refinery utilization, which may help temper upward pressure on oil prices. I also believe we'll see an increase in utilization on the East Coast- an area that has seen terrible numbers as plants prepare for heating oil season. Crude inventories will drop while gasoline stocks should increase. The market will likely focus more on crude or distillates, but gasoline will accompany the two on the ride.
Here's my predict for this week... U.S. average will increase by next Monday to $2.84 in the U.S. and 104.5c/L in Canada.