Nov. 2, 2009 – No huge gas price swings expected for 2010

Minus the seasonal swings, the price of gas in the United States has remained relatively stable this year — a trend that is expected to continue next year.
There is expected to be an upswing in 2010 oil prices, but nothing like what was seen in 2008 when $4 and $5 per gallon gas prices resulted in unusually high scooter and low-displacement motorcycle sales.
Gas prices per gallon are expected to average $2.65 next year, according to the Oct. 6 short-term energy outlook provided by the federal government’s Energy Information Administration.
Neil Gamson, an economist for the Energy Information Administration, noted the government might not have a perfect forecasting record but certainly nothing they see points to a repeat of 2008.
“We’ve missed the boat many times (on forecasts) but we’re not anticipating any surprises next year,” he said.
The government forecast wasn’t too far off earlier this year when it predicted gas prices would average around $2 per gallon over the course of 2009. National averages in fact stayed under that total until mid to late spring when the seasonal supply-and-demand resulted in national U.S. gas prices rising to around $2.50 per gallon.
There are a number of factors, of course, that could cause the price of oil to fluctuate going forward. The Energy Information Administration actually lists at least nine such factors, including OPEC production decisions, global economic growth and exchange rates and inflation to name a few.
But current weak demand and high oil inventories are expected to keep 2010’s price increase at the gas station at
relatively stable levels.
“What could possibly do this again?” Gamson said of the volatile 2008 gas prices, which he likened to “a 100-year storm.”
“It would have to be some unforeseen geo-political situation where oil is cut off for some reason. We don’t anticipate that.”
— Neil Pascale

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