How high will gasoline prices go this summer?

Question

Will gasoline hit 4$ or will it drop done to 2$ a gallon Why is gasoline prices so crazy?

Answer 1

The problem with predicting gas prices is that in order to do so you would have to be able to predict the future (from a social and political standpoint). I deal in commodities for a living and watch the oil and gas markets everyday. In economics they teach that commodity pricing is a function of supply and demand, but that is only half of it. A greater influence today is human emotion and the political landscape.

For example... Iran writes an apology letter to the United States for being such a pain about their nuclear program, and a barrel of oil will fall $2.50 is one day. The level of global supply has not changed. The level of global demand has not changed. But the psychological mindset of traders and the anticipation of future supply and demand has changed, and for the better, so the price falls. It works in reverse the same way.

So the short answer is nobody can really know unless they know what will happen in the middle east, south america, or china over the next couple months. Longer term the question is how quickly the world will embrace alternative fuel. From a summer budgeting perspective though, in my own opinion, I'd say bet on a slight drop over the next few weeks to about the $2.75 range. You won't see $4 this summer unless something really crazy happens.

Answer 2

For my budget, I am planning for gas to get 50 cents a gallon higher that it did last year. Where I live, that would mean $3.50 a gallon. That is still less than the prices I saw in Europe in 1992, where it was around $4 a gallon.

Gas prices are high because of a number of things, including the need for summer blends, the wrold political climate, and the high demand from American consumers.

Answer 3

dont be shocked if it goes above 4 bucks. gas prices are so crazy because the companies know that they can charge anything and people will pay because they need the gas. Politicians dont care so you really have no choice but do buy it.
The way that the government and the compaines want is for gas to stay over 3 bucks and everybody to get used to it.