Today’s gasoline prices, while higher than normal for this time of year, could end up looking cheap come springtime, says one prominent oil analyst.
Pump prices nationwide for regular unleaded could hit an average of $3.25 to $3.75 a gallon early next year on higher crude oil prices and a seasonal rise in gasoline demand, Tom Kloza, senior oil analyst with the Oil Price Information Service predicts.
“My view of 2011 suggests that we are looking at the second fuel price apocalypse of the 21st century, commencing during a time line that will begin with spring training and end when the Cubs are written off as a baseball non-contender,” Kloza writes.
As for whether U.S. pump prices will reach an average of $3 a gallon before the end of 2010, he says it could go either way.
The national average retail price for regular unleaded held overnight at $2.98 a gallon, while the Houston average rose a fraction of a cent to $2.80 a gallon, according to AAA’s Daily Fuel Gauge Report.
The national average has not surpassed $3 in more than two years, and has never hit the $3 mark in December. The all-time record is $4.11 a gallon, set in July 2008.
Prices will begin to rise early next year amid a surge of money moving into oil futures from investors anticipating the typical springtime rise in fuel demand, Kloza observes.
“ The spring move will be helped in part by fundamentals, but money flow is the performance-enhancing drug for prices,” he writes.
Photo: David Zalubowski/AP