Where Do Gas Prices Go From Here?

Now that the world has had time to breathe a collective sigh of relief after the very peaceful and amicable resolution to the “Iran Hostage Crisis – Part II” gas prices will start to fall and ultimately this summer won’t be as bad as what we experienced last year… right?

Not according to many analysts, some of whom are predicting $4 gas in the very near future, which would shatter the record highs set last summer.

In an article published on ABCNews.com, Phil Flynn, vice president and trading analyst for Alaron Trading, stated the following:

“Things are looking pretty bad for the upcoming summer driving season.  This is the time of year we’re supposed to be building supplies, but it seems like the refiners just can’t get ahead of what has been very, very strong demand.  Everyone asks me, will we see $4 a gallon?  And the answer is, there is a strong possibility we may see $4 a gallon.”

This seems to be a pretty far cry from what the Department of Energy said a month ago when they released a report that stated gasoline prices would more than likely top out right around $3 per gallon.

Unfortunately, my instinct is to side with the analysts.  If you paid any attention to oil and gasoline prices during the stand off between Iran and Great Britain, prices would make wild swings based on unsubstantiated rumors.  And can anyone honestly tell me that this summer is going to have any less geopolitical tension than what we experienced last summer?  If anything, we’ll probably have several more show downs before we hit September.

As I’ve said many times before, the days of cheap oil and gasoline are long behind us – and $4 gasoline is a lot closer than you think.

Comments

  1. Where do they go? They go up. If you want to know more go read “twilight in the desert” by Matt Simmons:

    http://www.amazon.com/Twilight-Desert-Coming-Saudi-Economy/dp/047173876X

    Basically you’re screwed. Sorry.

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