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Despite the unseasonably early jump in gas prices – which are up nearly 30% since the end of January – the Department of Energy has reiterated its believe that this summer’s average gas price will actually be less than what we paid last summer.
According to NPR’s Morning Addition, the Department of Energy believes that the national average gas price this summer will be about $2.81 per gallon, which is roughly three cents less than last summer’s average.
After I read this article, I was left scratching my head, because the scenario laid out by the DOE doesn’t seem to make any sense. When I went to GasBuddy.com today, it said that the current (as of April 11) national average gas price is already $2.82 – and we haven’t even hit peak driving season.
If I’m reading this correctly – and I’d like to think that I am – it sounds like the DOE is saying that as we enter both the peak driving and hurricane seasons, and continue to deal with turmoil in the Middle East, gas prices will remain relatively flat throughout the summer. That or we’ll experience a spike in prices but will then have a steep enough drop off so that prices will be less than what they are right now.
Don’t get me wrong, I certainly hope that the DOE is right, but this just seems completely unreasonable and unlikely.
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Part of the reason gas prices are increasing as much as they have is due to short supply of gasoline. Steep drops in gasoline reserves are seen each weekly inventory. However, we are not at 100% production. OPEC supply cuts are still in place. It would seem that the DOE expects OPEC will (and responsibly should) increase supply during the summer months to prevent the oil spike we saw last summer. Although, the had said $55/bbl was resonable before considering more cuts in supply when oil couldn’t hold above $65…