Posted in: Gas Prices,
by Patrick DeHaan on Mar 14, 2011 11:42 AM
The weekly gasoline outlook is returning today- celebrate knowing where prices will be headed (well, its not exactly Mardi Gras with higher prices, but at least you won't have to ace a course in economics to know what's on tap at the pump this week!)
We've been swamped at GasBuddy lately. As it turns out, I don't need a window to see what's going outside- I just check Facebook and see the phone ring, and ring it has.
On to this week's gasoline outlook! It's obvious that speculation is fueling prices more than any other factor- speculation over the Middle East, speculation that summer demand will rise through the roof, etc. As it turns out, while Wall Street firms cash in, we're subject to pain at the pump- pain that may ease in some areas this week!
The situation in Japan is this- six refineries have shut there, and while its likely that will mean higher prices for them, for motorists in North America, it means that the 1.4 million barrels that those Japanese refineries refined are now not needed at the present moment, and with the additional supply, it is easing oil prices. However, there are certain oil products that will become more expensive.
Oil prices are cheaper because Japanese refineries are closed. Gasoline prices will stabilize because prices have caught up with the increase in crude prices, or, in some areas, prices may fall because wholesale gas prices have been moving lower after the situation in Japan. The one product that will rise in price is diesel. Why? You may have heard that numerous nuclear plants in Japan are offline. They need power. What can they use as a short term solution? Diesel powered generators. Which is precisely why diesel prices are up at this hour.
I expect that by next Monday, the U.S. average will be virtually unchanged- some areas will see prices fall, a few areas will see prices rise (Rockies, West Coast). I expect prices in Canada to rise as much as 1c/L. The bottom line? I don't at this time foresee rapid increases, and the good news is that with recent events, it could cause oil prices to drop in the short term. We'll keep you up to date, as always!