Gas Prices Fall, But Start Year At Record Highs
WEXIndex Retail Fuel Price Index is a monthly publication produced by WEX Inc. with market insights provided by OPIS Energy Group. ®Copyright 2013, WEX Inc., 97 Darling Avenue, South Portland, ME 04106. Reproduction without permission is strictly prohibited.
Gas prices hit their low for the year on Dec. 20 — dropping to an average of $3.21 per gallon — but rebounded in the last 10 days to close the year at $3.30, according to WEX Inc. This average is the highest retail average ever, WEX said, and experts forecast that 2013 will look very similar to 2012.
Forecasters predict prices will remain stable with a slight jump in January before starting the annual spring price hike. WEX said that some market watchers believe prices will get as high as $3.90, but don’t anticipate the national average to breach the $4.00 per gallon mark without significant supply disruptions. If prices do move above $4.00 per gallon, WEX said that it’s not likely prices will stay above that threshold for very long.
Demand has been soft, especially in the last 90 days of the year, according to WEX. As prices head higher, demand continues to tail off significantly. Many chains report that sales are off by as much as 10% from the 2007 peak and off by at least 1-2% from last year. WEX said that this is the main reason most analysts believe that prices cannot be sustained at ultra-high levels.
Diesel prices are $3.90 per gallon, which is 10 cents higher than last year. A cold spell in the Northeast could push prices higher since heating oil sales can eat into diesel supplies. However, forecasters say that a more mild winter — despite the subzero temperatures currently seen — that could be good news for fleets that operate heavily on diesel.
Retail fuel prices as of December 2012
|Los Angeles, CA||$3.70||$4.13|
|New Orleans, LA||$3.11||$3.73|
|San Francisco, CA||$3.69||$4.28|
|St. Louis, MO||$3.02||$3.70|
See last month's report here.