Analysts predict $4.00 a gallon for gas by summer

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by Dave Cassidy, 13News

WVEC.com

Posted on February 6, 2013 at 7:49 AM

Updated Wednesday, Feb 6 at 8:01 AM

WASHINGTON, DC - Americans have never paid this much for gasoline this early in the year and there's no relief in sight. Experts say prices could hit $4.00 a gallon by summer.

 

The Energy Department will release the latest numbers Wednesday morning and it's starting to look like 2013 could be worse than 2012.

In the last week, the national price for a gallon of gas shot up 17 cents and prices are a nickel higher than a year ago.

Analysts say speculators, believing an improving world economy could mean more demand, started driving up prices before Christmas.

Other reasons for the jump in prices are that some U.S. refineries shut down for maintenance to prepare for the switch to summer gas blends and Saudi Arabia cut production at the end of the year.

Even though demand was down last year, Americans spent just under 4 percent of their incomes on gas last year - the most in 30 years.

Some experts say high gas prices aren't such a big deal anymore because people are getting used to them.  This year, though, everyone's take home pay is 2 percent lower because the payroll tax "holiday" ended.  So, we have less money to spend and have to spend more of it at the gas station.

Since we're producing more oil here at home now - shouldn't prices be going down? The problem is the price of the oil we produce here at home is set by the same traders in same oil markets. Also, we're not building more refineries to process all the extra oil we're producing. So, our increased production has almost no effect on the price at the pump.

 

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