Skyrocketing gasoline prices may soon hit their peak, giving motorists some relief at the pumps soon.
Gasoline prices have been steadily rising since the New Year as analysts warn that they will likely peak above $4 a gallon by Memorial Day. Houston drivers are $3.77-per-gallon of gas today, a rise of 20 cents since last week, according to AAA gas gauge.
However, relief might be on the way.
Tom Kloza, chief oil analyst for the Oil Price Information Service, told the Los Angeles Times that prices could begin to fall after the price of CARBOB, a key ingredient of gasoline, has plummeted from its February highs.
Kloza told the newspaper the plummeting price could signal California prices have peaked.
“California is often the first market in the country to peak,” he told the newspaper, “and the trend spreads from west to east. We’re still looking at more increases in prices in states east of the Rockies, but this is a notable development that should eliminate the insane predictions of $5-a-gallon gasoline.”
There are, however, some unknowns that could push prices back up at the pump.
Analysts warn that three closing northeast refineries could tighten supplies over the summer months and rising tensions with Iran could boost crude oil prices, which account for about three-fourths the cost of gasoline.
The other good news is lower crude oil prices.
Oil prices are trading at a nearly one-week low after new reports suggested rising U.S. stockpiles and Saudi Arab officials said they would be able to offset any shortfall caused by Iran sanctions.
President Barack Obama also discussed tapping the U.S. strategic reserve during his meeting in Washington yesterday with Britain’s Prime Minister David Cameron. Democrats have urged him to tap the reserve to help lower prices at the pump, but analysts have said in the past that it will likely cause little change.
Gasoline prices could still edge up close to the $4 mark, but they shouldn’t hit the $5 predictions of some analysts and energy leaders.
Some Houston drivers already got some relief at the pump.
More than 375 drivers got 15 gallons of gasoline for free as part of a Shell giveaway on Wednesday.