Editor’s Note: GasBuddy.com has released its 2013 fuel forecast. It was written by Patrick DeHaan and Gregg Laskoski, senior petroleum analysts. Their report provides a far more in-depth look from an earlier story provided by The Associated Press. To read the entire report click here.
We can expect significant volatility in gasoline prices during 2013, but most notably during the following periods for the following reasons:
April 1 through May 15
- Refineries begin producing cleaner burning summer gasoline and perform maintenance. Problems typically arise from plant restarts and low supply of mandated blends until maintenance season is over, usually in mid/late May.
August 1 through September 15
- Hurricane season has brought significant harm to oil infrastructure in the last decade, and while hurricanes are not guaranteed to impact such facilities, such an event could interrupt notable infrastructure: Louisiana Offshore OilPort (LOOP), Gulf Coast refineries, Strategic Petroleum Reserve, Offshore oil drilling. The fear of a storm impacts oil prices.
October 15 through November 15
- Winter gasoline phase-in will likely lead to some downward direction, but could also result in some volatility surrounding refinery maintenance. This time frame will likely see lower volatility in prices compared to the previous two time frames listed.
Issues likely to have a significant impact on gasoline prices:
- Federal policies: One of the consequences of the quantitative easing programs is that it weakens the value of the U.S. dollar versus global currencies. Where crude oil is concerned, that’s especially important since global crude oil transactions use the U.S. dollar as the prime currency. When the dollar loses value, crude oil climbs higher and Americans pay more for gasoline.
- Record exports of oil and petroleum products have kept pressure on domestic prices. As of January, 2013, the Energy Information Administration reports that exports have risen 217% in the last 10 years, most recently rising to nearly 3 million barrels per day. The amount of products exported amounts to over 16% of what Americans consume every day.
- Refinery issues from coast to coast illustrated our infrastructure vulnerability in 2012. In 2013 we’ll need to see improvements in addressing safety issues. We’ll also see whether refineries have sufficiently addressed the weaknesses that were exposed last year. A focus on safety and flexibility may help mitigate the spikes that are inevitable during the spring transition from winter blend gasoline to summer blend production.