Gas prices could soar in August. Here's why.
Typically, fuel prices spike in the spring and the fall, as refineries stop making one seasonal blend of gasoline and start making another. The changeover produces an artificial gas shortage that drives prices up until the floodgates open and a new fuel blend arrives.
But according to CNN, motorists could see pump prices rise by 25 or 30 cents per gallon next month -- well before the uptick we expect in September and October. That prediction comes largely from oil trader Dan Dicker and industry analyst Tom Kloza (the latter of whom works for one of our favorite gas pricing sites and apps, GasBuddy).
Here's the problem as they see it. Gas futures and oil prices have been on a tear in recent weeks, climbing more than 10% over the past month alone. But at the pump, prices haven't moved in a steady line. Four weeks ago, the average price for a gallon of unleaded was $3.63. Last week, it was $3.48. Yesterday, it was $3.52, and today, it's $3.55.
That rise we've witnessed over the past week could be the start of something major, with gas prices beginning to reflect gas futures and oil prices. And we may not have seen the worst of it.
Though ongoing fears of turmoil in the Middle East could certainly affect oil prices, an even bigger problem may be the plummeting price of gold. Over the past year, the price of gold has fallen from nearly $1,800 per ounce to around $1,275 per ounce today. According to Dicker, traders and fund managers who prefer commodities have been funneling money that they would've put in gold into oil. That's driving oil prices up, and gas prices should ultimately follow.
Our take? We're not oil analysts, so we're not experts in these matters -- not by a long shot. However, we know that few people can accurately predict the future. Heck, even Nate Silver would have a hard time nailing down gas and oil prices, which seem especially squirrely.
That said, Dicker and Kloza clearly know their stuff, and their arguments do make sense, so we wouldn't be surprised to see gas prices tick up 20 or 30 more cents before summer's end.
That doesn't mean much for most folks, though. Unless you've got a safe, easy means of stocking up on gasoline before your August road trip, you may just have to grin and bear it at the pump.
The folks most affected by news like this are car shoppers. Due to inflation and other factors, fuel prices aren't likely to dip below $3 per gallon in the near future -- if ever. If you're in the market for another set of wheels and fuel economy is important to you, check out the stats onnew and used cars in our handy-dandy shoppers' guides.
