BROOKLYN PARK, Minn. -- Consumer fuel price tracker GasBuddy has released its Annual Gasoline Price Outlook for 2012. Its tiered scenarios indicate that prices could break the $4 per gallon mark by April and approach $5 per gallon for Labor Day in some markets.
The outlook (see chart) is not indicative of what will happen, rather, it is what GasBuddy experts believe could happen, given specific inputs and different impacts and scenarios on production, supply and demand.
Issues likely to have a significant impact on gasoline prices:
Iran. Continued destabilization of Iran and perhaps other parts of the Middle East will make a strong impact on gasoline prices. Continued threats will haunt the market and could drive prices higher. Iran continues to be a major factor that could result in higher gasoline prices in 2012.
"2012's Iran situation isn't 2011's Libya situation--not by any means; it's far worse. Consumers who think the Iran situation is over-hyped clearly don't understand the high stakes behind not only the Strait of Hormuz, but behind the Iran's feud with the West," said Patrick DeHaan, senior petroleum analyst for GasBuddy.
Record gasoline and distillate exports have kept pressure on domestic prices. As of January, 2012, the Energy Information Administration (EIA) reports that distillate exports amount to almost 25% of all domestic production.
Refineries may elect to send material out of the United States as margins become slim on gasoline during the cooler months.
Keystone XL. The proposed new pipeline has the potential to shake up prices in either direction. Taking a cheap source of crude away and subjecting it to international markets will likely mean higher prices for Canadian sour, a grade of oil used nearly exclusively by Midwest refiners. Approval could mean higher prices for Canadian sour crude, thus an increase being passed on to motorists. It could also result in slimmer margins for refineries that have long enjoyed profitability using the oil. (Editor's Note: As expected, President Obama denied the permit application for the Keystone pipeline. See below.)
GasBuddy also issued a 2012 Memorial Day forecast for selected major cities (averages expected for regular unleaded gasoline):
- Atlanta, $4.25-$4.60.*
- Boston, $4.10-$4.35.*
- Charlotte, N.C., $4.00-$4.35.*
- Chicago, $4.60-$4.95.*
- Columbus, Ohio, $4.20-$4.55.*
- Dallas, $3.80-$4.15.*
- Denver, $3.85-$4.05.
- Detroit, $4.15-$4.50.*
- Houston, $3.95-$4.25.*
- Indianapolis, $3.90-$4.25.
- Jacksonville, Fla., $3.95-$4.20.*
- Los Angeles, $4.45-$4.70.
- Memphis, Tenn., $3.95-$4.30.*
- Miami, $4.05-$4.40.*
- Minneapolis, $4.15-$4.45.*
- New York City, $4.30-$4.55.*
- Philadelphia, $4.15-$4.40.*
- Phoenix, $3.90-$4.20.
- San Francisco, $4.50-$4.85.*
- Seattle, $4.40-$4.65.*
*Prices would represent new all time records.
Brooklyn Park, Minn.-based GasBuddy was founded in 2000 to save motorists money at the pump and has become a leading source of gasoline price data. Pricing data is derived from both its large number of volunteer price spotters and stations that participate by sending pricing data directly to GasBuddy. Average gasoline prices are continuously updated using new data inputs, and GasBuddy is the only source of near real-time pricing data, 24 hours a day, 7 days a week. It runs more than 250 gasoline price-tracking websites covering all of the United States and Canada.
Statement by President Obama on the Keystone XL Pipeline:
"Earlier today, I received the Secretary of State's recommendation on the pending application for the construction of the Keystone XL Pipeline. As the State Department made clear last month, the rushed and arbitrary deadline insisted on by Congressional Republicans prevented a full assessment of the pipeline's impact, especially the health and safety of the American people, as well as our environment. As a result, the Secretary of State has recommended that the application be denied. And after reviewing the State Department's report, I agree.
"This announcement is not a judgment on the merits of the pipeline, but the arbitrary nature of a deadline that prevented the State Department from gathering the information necessary to approve the project and protect the American people. I'm disappointed that Republicans in Congress forced this decision, but it does not change my Administration's commitment to American-made energy that creates jobs and reduces our dependence on oil. Under my Administration, domestic oil and natural gas production is up, while imports of foreign oil are down. In the months ahead, we will continue to look for new ways to partner with the oil and gas industry to increase our energy security--including the potential development of an oil pipeline from Cushing, Okla., to the Gulf of Mexico--even as we set higher efficiency standards for cars and trucks and invest in alternatives like biofuels and natural gas. And we will do so in a way that benefits American workers and businesses without risking the health and safety of the American people and the environment."
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