While forecasting fuel prices has always been a challenge, everyone agrees that 2017 is a year that gas prices will peak in the United States. Why? Read on!
Since 2012, gas prices have been slowly going down! Unfortunately, that trend is set to stop, according to GasBuddy, a mobile app that tracks the price of gas around the world. They predict that the national average price of gasoline is expected to significantly increase this year, and especially in California!
Why is this happening?
The November 30th agreement by the Origination of the Petroleum Exporting Countries (OPEC) is responsible for the surge in prices this year. This agreement cuts oil production by 1.2 million barrels a day starting this year. A decrease in production equals a decrease in supply, meaning that by simple economics, prices will go up!
What to Expect:
The country should expect that gas prices will trend higher as the year goes on. This trend might not be a steady increase and you should expect sudden peaks in price as the seasons change. For instance, the season switch from winter blend to summer blend, as mandated by EPA and the Clean Air Act, will be one of the causes of a sudden spike. It is expected that the national average gas price will rise 35 to 60 cents between mid-February, and will peak in May.
While the West is still home of the most expensive gasoline states, California is the 2nd most expensive state at $2.76 a gallon, next to Hawaii, who is the most expensive with a statewide average of $3 a gallon.
We know that this increase in price will have a negative impact on most people, but stay tuned for our next blog where we give you tips on how to reduce your gas usage!
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