Data Sense: Gasoline prices expected to fall
June 11, 2013
Summer is in full bloom. It is the time of year when travelers hit the Colorado roads and make the journey to the Yampa Valley to enjoy all that Routt and Moffat counties have to offer. It's also the time when Yampa Valley residents head out of the valley to explore the rest of the Rocky Mountain region. Naturally, the burning question on everyone's mind is: Where can we find cheap gas?
Fortunately, an analysis of Steamboat Today's weekly survey of local gasoline prices provides the answer. Even more fortunate for road warriors, the latest oil price forecasts indicate that gasoline prices are poised to fall starting in July and will continue to drop throughout the next several years.
According to the Steamboat Today's gas price survey published June 3, the average price of a regular gallon of gas in Steamboat Springs was $3.87 per gallon. This price represented a slight increase over the same time last year, when prices averaged $3.83 per gallon. Gasoline prices in Steamboat Springs last week were 31 cents per gallon above the national average, which stood at $3.56 per gallon, according to the U.S. Department of Energy's Energy Information Administration.
The Steamboat Today survey also tells us that gasoline prices in Steamboat Springs are up 19 cents per gallon since March. The recent upward movement represents the typical rise in gasoline prices during the summer driving season. Last year, local gasoline prices increased by 45 cents per gallon between March and June before settling in the $3.86 per gallon range for the summer. This seasonal trend is mirrored at the national level.
If you're looking for the best gasoline price in town, it's at Western Convenience, where regular gasoline prices have averaged $3.64 per gallon during the past year, compared to $3.71 for all of Steamboat Springs. The difference adds up. A 6 cents per gallon price difference throughout the course of a year amounts to $600 if your vehicle travels 10,000 miles per year. Western Convenience also is the best bet for diesel at nearly 11 cents per gallon below the town average.
So where are gasoline prices headed in the future? According to the latest forecast by EIA, they are poised to move down. The largest component of the price of gasoline is crude oil, which accounts for roughly two-thirds of total price at the pump (refining, distribution, marketing and taxes account for the rest). EIA officials think oil prices are headed down because the world's ability to supply oil in response to unexpected demand changes, known as the "spare capacity," is on the rise. This means there will be enough slack in international oil markets to push prices down throughout the next several years.
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EIA's crude oil price forecast indicates that Steamboat Springs gas prices will peak this month in the $3.80 to $3.90 per gallon range and then drift down through 2014, eventually falling to $3.30 per gallon by the end of 2014. Next year's summer price peak will reach $3.60 to $3.70 per gallon. The usual caveats apply when it comes to forecasting highly uncertain markets like energy, but as of right now, the best available information indicates that there will be a little less pain at the pump in the very near future.
Brandon Owens is an independent contractor who peforms data analysis for Yampa Valley Data Partners. He can be reached at email@example.com.