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Why US Gasoline Prices will Fall in the Coming Weeks

Even though gasoline prices in the US are currently $0.15 a gallon higher than this time last year, and have been constantly rising for the past two months, Robert Rapier predicts that they will start to fall rapidly in the coming weeks.

First, he states, is the fact that the price spike caused by Hurricane Isaac will quickly drop due to the fact that the damage to infrastructure seems to be small and therefore oil and natural gas production is expected to return to normal very soon.

He also reminds us that the summer is over. That means two things; one, that the driving season is over so demand for gasoline will fall; and two, that on the 15th of September the cost of gasoline will drop and supply increase as winter gasoline is supplied to the pumps. Winter gasoline is made up of a different blend of hydrocarbons than summer gasoline, as explained in this article.

These factors make it very likely that gasoline prices will now fall in the run up to the elections. Of course there are always other factors that could come about and cause the prices to rise, but the as things currently stand you should expect prices to drop.

An even larger drop could occur if Obama decides to release oil from the Strategic Petroleum Reserve.

By. Charles Kennedy of Oilprice.com

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Leave a comment
  • Nothing But Gingerbread Left on September 13 2012 said:
    Sorry Charlie, you've taken the latest train to Crazytown (Population = You!). Put down the crack pipe, take off the Ron Paul (tm) Tinfoil Hat, and just repeat this mantra...

    "five BUCKS a GALlon GASoline by CHRISTmas"

    Repeat it until you can't get it out of your head:

    "five BUCKS a GALlon GASoline by CHRISTmas"

    Keep it up till Christmas finally arrives. Then, when you see that it's a good deal above 5 bucks a gallon, you will thank me for the info. Of course, your poorer friends may not be able to drive to town for groceries or (if they're in New York's North Country) be able to use heating oil, but at least you can tell them that I told ya so.

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