Gas prices could dip 10 cents this year

WEST PALM BEACH, Fla. -- Gasoline prices will be taking a wild ride in 2014, as huge swings are expected, but overall the average should be 10 cents lower than last year, the website GasBuddy.com has forecast.

''The supply side is very strong," Gregg Laskoski, a Tampa-based GasBuddy senior analyst, said.

''What we have seen with this domestic energy boom is creating more available fuel. We have crude oil coming from multiple sources."

For now, however, prices are on the rise.

''We are expecting there is still going to be volatility. We expect the seasonal increases to occur as they always do in the first and second quarter," Laskoski said.

This year's national average for regular was $3.50 a gallon, the federal Energy Information Administration said.

If the 10-cent dip occurs in 2014, that would push the year-long national average below $3.40 a gallon for the first time since 2010, GasBuddy.com said.

But for now, prices are on the rise, as the price of a barrel of oil rose to more than $100 last week, said AAA's Jessica Brady. The increase is expected to continue through January.

On Monday, the national average for regular stood at $3.31 a gallon, up from $3.25 a week ago.

''The jump in crude prices means more expensive gasoline," Brady said.

''The increased demand is taken as a sign the economy is improving and fuels optimism that the growth will continue in the new year. Motorists will see gas prices increase for the next few weeks before relief is in sight."

While GasBuddy is forecasting the 2014 average for regular to be 10 cents lower than last year's, the energy administration is predicting it will be 7 cents lower, or $3.43. In 2012 the average was $3.63 per gallon for regular.

As always, the forecasts are made with the caveat that either global geopolitical turmoil or a weather event such as a hurricane could adversely affect the petroleum markets.

Chris Christopher, director of consumer economics at IHS Global Insight in Lexington, Mass., said that by the end of 2014, gasoline prices should be 12 or 13 cents lower than they are now.

''Global demand is relatively weaker, and there is not that much turmoil in oil-producing regions," Christopher said.

Lower gasoline prices can help the economy, as consumers become more confident about making other purchases, Christopher said.

But watch out. This spring, gasoline prices above $4 a gallon could hit consumers. The national average is predicted to peak at $3.83 a gallon this spring, GasBuddy said.

Of course, it's not known how long the peak will last. Laskoski said in 2013 prices began rising in April, but were coming down by early June.

The seasonal spike occurs every year as refineries perform maintenance ahead of the driving season and make the switch to more expensive summer fuels.

Susan Salisbury writes for The Palm Beach Post. E-mail: susan(underscore)salisbury(at)pbpost.com.

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