Gas prices could stay low all year

It appears that motorists enjoying the lowered gasoline prices of the last few months should be able to keep pumping at favorable prices throughout 2015. That’s the assessment of GasBuddy.com, which released its fuel outlook for this year earlier this month.

That’s the good news. The bad news, if you can call it that, is they probably will not get any lower.

“The light at the end of the tunnel is dimming as gasoline prices have nearly caught up with the drop in crude oil prices,” said Patrick DeHaan, a senior petroleum analyst with GasBuddy. “Last week saw a rally in oil prices Wednesday, before caving again Thursday, then rallying again Friday — a sign that perhaps we’ve seen a bottom in oil prices, and perhaps thus a bottom in gasoline prices as well.”

As of Monday, Jan. 19, the cheapest gas in Wilton could be found at the Citgo station on Danbury Road where regular was selling for $2.34 per gallon, but by Tuesday it had jumped to $2.41.

The average in Connecticut on Tuesday was $2.33 per gallon for regular, well above the national average of $2.049. The cheapest prices in Connecticut are in the Waterbury, West Hartford and Bridgeport areas where regular has been selling for around $1.99 a gallon.

The average price of $2.33 per gallon in Connecticut is more than $1.36 per gallon less than the same day a year ago and 50.8 cents per gallon lower than a month ago.

Taking a national view, GasBuddy sees some increases from February through April as refineries deplete their inventories of winter-blend gasoline and switch over to producing a more expensive, cleaner-burning summer blend. And, the Northeast will see some price increases due to a decline of North Atlantic refining in recent years.

“It’s going to be difficult for Americans to face another spring-time spike in gasoline prices but hopefully, when we do see prices climb it will be much more palatable especially if we see pump prices start with a $2- instead of a $3- for most of the time,” said GasBuddy petroleum analyst Gregg Laskoski.

To that end, GasBuddy projects the national price of gas will average $2.48 through the first quarter of 2015; $2.87 through the second quarter, $2.73  and $2.49 for the third and fourth quarters, respectively.

“For the year, GasBuddy projects the U.S. average gasoline price to be $2.64, amounting to a savings of $97 billion during 2015 versus the $465 billion motorists shelled out for gasoline in 2014,” the organization said in its fuel outlook.

“Towards the end of 2014, the market showed bountiful supply, strong production, and not enough demand to suck up the inventory,” said Allison Mac, a petroleum analyst with GasBuddy. “Much of these factors will carry over into 2015. Overall, prices at the pump will be lower than they have been in recent years, and once again the $2 sign will become a familiar number to see on street corners.”

All of this must be taken in the context of the volatility within the oil industry. GasBuddy said its forecast could be dramatically altered if OPEC reverses its policy of allowing crude oil prices to drop and pursues higher prices. Natural disasters, such as hurricanes, could also disrupt the work of refineries and drive up prices.

Increased taxation is always a temptation for state and federal officials. Several states have already raised taxes this year and for the first time in 22 years, the federal government may look at increasing taxes on gasoline, GasBuddy warned.