TORRANCE, CA – Wright Express (WEX) released its latest fuel prices analysis for September along with an updated forecast of prices through the end of the year. Retail prices have dropped to an average price of $3.78 per gallon after rising to a high of $3.87 on Sept. 14.
Analysts had been predicting larger drops in fuel prices than have been seen so far. Although some parts of the U.S. have seen prices drop 12 to 18 cents, specifically in the Midwest, the East and West Coasts have actually seen prices go up. According to WEX, low inventories combined with more refinery problems are keeping prices high. In the northeast, WEX said analysts expect oil imports to increase soon, which would drive down prices in that region.
On the West Coast, specifically California, WEX said prices will likely go up until refineries in the region return to full production and inventories rise.
AAA also released its latest monthly gasoline prices report, stating that the September monthly average price for a gallon of gasoline was $3.83, and was the most expensive ever for that month. The company said the previous record-high average for September was $3.72 per gallon in 2008. AAA predicts prices will drop by Election Day, but agreed with WEX’s outlook that prices on the West Coast and northeast could remain high until inventories climb.
WEX said analysts have pushed back their previously predicted price drop of 50 cents per gallon by Thanksgiving to the end of the year. Still, even if that drop does occur, the resulting price would still be 25 cents per gallon higher than the lowest price gasoline fell to at the end of 2011, according to AAA.
AAA also stated in its recent monthly price report and outlook that gas prices in 2012 are on track to be the most expensive ever. The company said that the average price for a gallon of gasoline in 2012 has been $3.64 per gallon, which is up from the $3.51 per gallon average in 2011 (the previous high).
As for diesel, WEX said international stocks are tight on supply, so the company expects prices to rise further, especially if a cold winter in the northeast drives up heating oil demand.
The chart below from WEX shows the gasoline price trend for the last two years: