Pump prices have continued plummeting into the new year, and analysts expect this to continue into January. But, price spikes could be on the horizon come spring.
Meanwhile, gasoline prices in Kansas have fallen 3.2 cents per gallon in the past week, averaging $1.97 per gallon Sunday, according to GasBuddy’s daily survey of 1,329 stations in the Sunflower State. This compares with the national average that has fallen 6.6 cents per gallon versus last week to $2.25.
Great Bend and Ellinwood fell just below this average at $1.93. Ellsworth reported $1.89 and Lyons $1.87.
The state lows as of Wednesday were $1.62 (cash price) in Wichita, and $1.69 in Wichita and Kansas City, Kan.
Average gasoline prices on Dec. 31 in Kansas have ranged widely over the last five years, noted Gasbuddy petroleum analyst Patrick DeHaan. They include: $2.26 in 2017, $2.18 in 2016, $1.75 in 2015, $1.96 in 2014 and $3.10 in 2013.
Including the change locally during the past week, prices yesterday were 29.4 cents per gallon lower than a year ago and are 21.3 cents per gallon lower than a month ago. The national average has dropped 21.3 cents per gallon during the last month and stands 23.8 cents per gallon lower than a year ago.
“As the national average price of gasoline continues to test multi-year lows, U.S. motorists are keeping over $250 million in their pocket every single day versus 80 days ago,” DeHaan said. “The plunge has seen sub-$2 gas prices show up at over a third of all gas stations in the country while eleven states have seen average prices dip under the $2 level.”
The most common price at gas stations in the U.S. is now $1.99 per gallon while the second most common price is just $1.89, he said. “With the plunge perhaps continuing for another couple weeks, many motorists have been asking how long this trend will continue into 2019- and the answer is that it’s complicated.”
It is possible summer gas prices won’t be anywhere near this low.
Down the road
In releasing its 2019 Fuel Price Outlook Wednesday, GasBuddy predicted that 2019 will feature a yearly national average of $2.70 per gallon, representing a three cent drop versus 2018, but warned that the national average could surge to over $3 per gallon as soon as May.
“While the bargain basement gas prices we’ve been seeing in areas across the country have been terrific and most welcomed, the party at the pump will likely wrap up in the next month or two,” DeHaan said. Prices will begin to rally as OPEC production cuts and a strong U.S. economy push gas prices back up.
The American Automobile Association agrees with this assessment. Heading into 2019, gasoline demand is expected to dwindle during the month of January, an expected change following the busy holiday travel season.
At the same time, OPEC was poised to begin production cuts on Tuesday, with hopes that the shift in global supply will push oil prices higher. The effectiveness of the cuts will likely not be known until later in the first quarter.
“All eyes are on OPEC to kick off the year,” said Jeanette Casselano, AAA spokesperson. “Many are waiting to see if they stick to their promise to cut crude production by 1.2-million barrels per day and if the proposed cuts will be enough to restore balance to the market.”
Over the past few years, OPEC and partnering countries have demonstrated a strong resolve to comply with proposed cuts in production, Casselano said. It is likely that the cartel will reconvene in April, and if there is a need to further balance global supply and demand, OPEC will likely tweak current production numbers at that meeting.
“While the national average failed to hit $3 last year, we have an even stronger possibility of seeing that ugly possibility, which would push prices in some places from $1.99 today to over $3 this spring – which would be an impressive and shocking turnaround in just a few months,” DeHaan said
One caveat however, that may have motorists unexpectedly spending less – what happens in the White House, he said. “Should all the darkest realities come to fruition, it could lead to slow down in the economy and take gas prices right along with it.”
As goes the economy, as go gas prices in the year ahead, DeHaan said. “Buckle up for the extra volatility we’re going to see – it could be nauseating.”
Some highlights from GasBuddy’s 2019 Fuel Price Outlook include:
• The nation’s yearly gasoline bill will fall to $386 billion dollars, a drop of $2.5 billion over last year as the average household sees their annual gasoline spending fall slightly to $1,991, down $25 from 2018.
• The national average is forecast to rise as much as $1 per gallon from a low in January to a possible peak in May, but economic jitters could weigh heavily on where gas prices go in 2019.
• Over 90 percent of the country’s largest metro areas are at risk for seeing average prices hit $3 per gallon, including Atlanta, Boston, Chicago, Los Angeles, Miami, New York City, Philadelphia, Phoenix, San Francisco, Seattle, and Washington, D.C.
• How accurate was GasBuddy’s 2018 Forecast? Assembled in late 2017, the forecast called for a yearly national average of $2.57 per gallon with a peak of $2.89 per gallon in April. 2018 ended with a yearly national average of $2.73 per gallon with a peak of $2.98 per gallon on May 24.