Each summer Americans head out in droves on family vacations, but high gas prices have curtailed this popular activity in the last several years. Steady drops in gas prices over the past several months have prompted talk about the future price of gas, and how it might impact driver habits during the summer.
One of the key indicators regarding whether gas prices might drop exists with the gas futures market and an expert recently suggested that several factors could enter into the arrival of low summer gas prices. The combination of high inventory of crude oil in the United States along with drops in the price of gas futures has forced prices down about 5% in recent weeks.
The arrival of lower gas prices during the summer would be unusual since oil companies often increase their prices during the summer because of all the drivers on the road and the increase of demand. With healthy inventory levels, the oil companies might not be able to increase their prices as much as they might have been able to in past years.
Although drivers during the summer will probably be very excited about paying less for gas, the predicted prices for gas in 2013 are still quite high regarding the average price. The cost of gas in 2013 might be lower, but the number would still be one of the highest recorded average prices ever seen.
The price of gas is often a volatile number, and there are a number of reasons why gas prices might increase. Supply and demand certainly impact the price of gas, but other elements such as political conflicts in oil producing nations, the incidence of bad weather, and even natural disasters may impact cost.
One of the benefits that the American economy might receive from lower gas prices would be the redirection of funds that were once used to pay for gas to activities like entertainment, where the economy has long struggled throughout the economic recovery. Such spending isn’t guaranteed as it would seem that American frugality has overtaken the budgets of many residents in the United States.
The recession in 2008 led to significant changes in expected spending behavior from modern Americans. Although more money might be available in the budget, no one is certain that the money will be spent on entertainment. Paying off old bills might be a more attractive activity.
One of the only certainties that economists and researchers can suggest regarding the potential for lower gas prices is that gas futures and the price of gas are never certain at all. Volatility with the price of oil is expected and common, and gas prices are rather unpredictable. Recent activity around the world has even led some to suggest that predicting gas prices is a futile exercise. The increases and reductions of gas prices seem much less stable than they were in the past. The idea that gas prices might go down for the summer has many people wondering if such predictions will hold true.
Although predicting exactly where gas prices might end up isn’t an exact science, positive indicators thus far suggest that more drivers and their families will be able to head out onto the open road this summer and drive a little further for their dollar due to lower gas prices.
This piece was composed by Daniel Dishman, a freelance writer who concentrates his energies on fossil fuels, alternative fuel possibilities, eco-conscious living, environmental preservation, solar power, natural resources and other associated topics; curious readers looking to expand their knowledge of electric power may want to view Tara Energy and Electrical Houston.