WASHINGTON, D.C. --- The Energy Department said this week it expects gasoline prices to stay in the vicinity of $3 per gallon for much of the rest of the summer. Any major price declines are unlikely to occur before September (after the Labor Day holiday) when demand typically drops sharply, according to the department’s Energy Information Administration (EIA).
The EIA noted that it’s uncertain whether prices during one or more of the remaining weeks of summer will exceed the previous record level of $3.07 per gallon, set on September 5, 2005. In its weekly report, the EIA stated:“Both August and September can be problematic when trying to forecast gasoline prices, as in August, the chance of severe thunderstorms affecting power to refineries rises, which can lead to less gasoline production than might otherwise occur. For both August and September, an increased likelihood of hurricanes, particularly this season, is another major uncertainty that can dramatically affect gasoline prices, especially if the hurricanes are powerful and hit the major oil producing and refining centers along the Gulf Coast, as Hurricanes Katrina and Rita did last fall.”
But if there aren’t any major shutdowns as a result of hurricanes, severe storms, or other factors, U.S. gasoline consumers in many parts of the country could see pump prices dip significantly below $3 per gallon in September, the EIA concluded.
Originally posted on Fleet Financials