As 2012 came to an end, a number of analysts offered a foreboding forecast for the nation — fuel prices were going to dramatically increase as time went on, and that increase would begin early in the winter months of 2013....
As 2012 came to an end, a number of analysts offered a foreboding forecast for the nation.
Fuel prices, those prognosticators predicted, were going to dramatically increase as time went on, and that increase would begin early in the winter months of 2013.
While those prices did increase to record numbers for February, as prices neared $3.80 per gallon across the United States by the end of the month, those same prices began to quickly drop, so that as of Wednesday morning the cost for a gallon of gas in Redwood Falls is $3.49.
According to the U.S. Energy Information Administration, the price for a gallon of gas actually dropped below $3 in early January and then the price began to quickly go up.
“There was an early price rally this year, and that price rose significantly in February,” said Patrick DeHaan, a senior petroleum analyst for GasBuddy. “The price then began to run out of steam, and it has been dropping since.”
GasBuddy, which regularly tracks gas prices at more than 140,000 stations across the United States and in Canada, is showing an average price of $3.52 in Minnesota.
Although there was that spike in February, GasBuddy is reporting the overall average price for the first quarter of 2013, including January, February and March, was below the same time in 2012.
Americans paid, on average 30 cents less for a gallon of gas during Easter weekend in 2013 compared to 2012. There are various reasons why the price was higher in 2012.
DeHaan said one year ago there were production issues at local refineries that led to a decrease in supply, which he said was one of the leading factors in the 2012 prices, and he said so far those refinery issues have not come up for 2013.
Of course, the refinery maintenance work is going to continue for the next couple of months.
The average retail price in Minnesota actually dropped from April 1 to April 8 by an average of 6.2 cents, and the national average de-crease was 4 cents.
Those prices, ac-cording to DeHaan, were 24.5 cents less than they were one year ago.
Every penny of price drop figures out to $3.6 million in savings nationwide, DeHaan said, adding once can see how significant these double digit price drops are for the average consumer.
Looking forward, DeHaan said he be-lieves the price seen now is going to continue with very slight fluctuations through most of May. He also anticipates the prices in June to drop to the $3.20 range.
“Summer prices usually drop in June and then begin to rebound,” said DeHaan, adding he would consider it a big stretch compounded by significant complications that would lead to $4 per gallon gas prices this year.
Domestic oil supplies continue to look very good, said DeHaan, especially the news out of North Dakota where the amount of oil being shipped has increased 10-fold over the past few years.
In 2005, there were 2.5 million barrels of oil shipped, and that number rose to 24 million in 2012. That, he added, ought to help keep a lid on oil prices and subsequent gas prices. The only limiting factor in North Dakota is transportation infrastructure.
The good news is forecasters have changed their tune for the rest of 2013 as production of domestic oil continues. That means lower prices for all of us at the pump.