Patrick DeHaan is a senior analyst at gasbuddy.com.
The U.S. national average gasoline price has begun heating up (after declining into early July) after oil prices rebounded from seasonal lows. Blame sudden optimism in the economy, blame Europe, you can blame whomever you like—but oil prices have seemingly bottomed out in late June before rebounding slightly, normal behavior after shedding over 20 percent of its value since peaking in April.
Motorists shouldn't be too alarmed at the rising prices. What we're seeing is exactly what we forecast back in January—that summertime prices would bottom out in June before rising slightly in July and August, mainly due to the volatility and threat surrounding the Atlantic hurricane season.
Gas prices in a large percentage of the United States will begin rising, if they haven't already. The Great Lakes states have already seen several double digit increases, followed by quick declines, and then more increases—certainly nauseating if you're a motorist in that region.
Elsewhere, prices have been slow to move on the West Coast but the pace of increases should quicken after refining problems at Tesoro's Wilmington, Calif. plant were reported. Motorists in the Rockies may see prices lag the national average, remaining relatively unchanged over the next week or two. Such behavior is typical for the region.
Motorists concerned about the recent rise need not worry. The recent rise in prices will not be anywhere near what we experienced this spring, lest something occur now that I've thrown out that bit. For the rest of the summer, I expect the national average to remain in the mid-$3/gallon range, with state averages falling anywhere from $3.20 to $3.80 per gallon (excluding traditionally high Hawaii and Alaska), with decreases coming once we enter autumn, another season of gasoline weakness.
So while motorists complain about the recent uptick in prices, I'll be quick to point out that in many areas across the country, today's gasoline prices are still lower than they were a year ago. Really—it's not all that bad.
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