Consumers are about to get a break at the gas pump for the rest of 2013 and much of 2014, analysts say.
Gasoline prices typically head lower after the peak summer driving season, and despite a blip Friday, wholesale prices reflecting September levels are slumping. Coupled with ample supplies and lower autumn demand, the national average price of regular-grade gasoline is likely to fall to about $3.40 in the coming weeks. That's y about 5% less than Saturday's $3.56 national average.
Relief at the pump looks even brighter for 2014 after three straight years of rising prices. The federal Energy Information Administration forecasts 2014 will average $3.37 a gallon versus an estimated $3.52 a gallon in 2013. That would be the lowest national average since 2010, when gasoline averaged about $2.80.
"Once we get to mid-September, we'll see prices drop 10 to 20 cents a gallon,'' says Tom Kloza, chief oil analyst for price tracker Gasbuddy.com. "Typically, demand drops the last 100 days of the year and bottoms out in December."
This year has been a rollercoaster for prices, and a volatile one in parts of the U.S. After starting the year at $3.29, prices surged to $3.79 by mid-February, then dropped to $3.50 by the end of April before climbing again. But renewed fears of unrest in the oil-rich Middle East - driven by the Egyptian military's ouster of President Mohammed Morsi - drove crude oil prices higher and kept them close to 15-month highs.
Meanwhile, wholesale prices spiked in the Northwest and West Coast after regional refineries undergoing maintenance, repairs and upgrades crimped supplies. In the Midwest, that meant unusually sharp price spikes that drove May pump prices to all-time highs in Minnesota, North Dakota and near records in several other states.
"The choke point has definitely been at the refinery level, where there were a series of unexpected outages and some refineries and a major upgrade at a BP refinery that kept it offline for months,'' says Brian Milne of tracker Schneider Electric.
Wholesale gasoline prices have been sliding. Despite a nearly 2% jump Friday to $2.90 a gallon, they're down from about $3.20 since late July.
"We've definitely seen the high for the year and we've got a pretty good downtrend,'' says Milne, who notes that the switch to less costly winter-grade blends will also push prices down.
Gasbuddy.com, which tracks prices in the U.S. and Canada, says regional price extremes remain, depending on where you live - ranging from sub-$3 a gallon gas in parts of Virginia and and South Carolina to the $4.79 average motorists are shelling out in Needles, Calif.
"There have never been bigger spreads in prices,'' Kloza says.