Please enable JavaScript to view the comments powered by Disqus.

Economic Forecasts

Gas Prices to Head Higher This Spring

Kiplinger's latest forecast on the direction of energy prices

iStockphoto

GDP 2.1% growth in ’17, following 1.6% in ’16 More »
Jobs Hiring pace should slow to 160K/month in '17 More »
Interest rates 10-year T-notes at 3% by end '17 More »
Inflation 2.5% in '17, up from 2.1% in '16 More »
Business spending Rising 3%-4% in ’17, after flat ’16 More »
Energy Crude oil trading from $55 to $60 per barrel in May More »
Housing 5% price growth by end of '17 More »
Retail sales Growing 4.1% in '17 (excluding gas) More »
Trade deficit Widening 4% in '17, after nearly flat '16 More »

Prices at the pump keep creeping higher. At $2.41 per gallon, the national average price of regular unleaded gasoline is up 2 cents from a week ago and 12 cents from a month ago. We expect the national average to hit $2.50 per gallon in coming weeks and to eventually top out around $2.70 later this spring. Diesel, now averaging $2.53 per gallon, is up slightly and will probably gain a few more pennies in coming weeks.

Crude oil prices are holding steady at around $53 per barrel for benchmark West Texas Intermediate, after WTI rose from the high $40s a few weeks ago. We look for WTI to reach at least $55 per barrel sometime in May as gasoline demand rises and refineries process more crude to meet that demand.

Via E-mail: Energy Alerts from Kiplinger

Don’t look for more than a modest increase in oil prices. Although OPEC continues to cut back its exports in an effort to push prices higher, U.S. oil production is now rising steadily. That trend is likely to continue as energy firms put more rigs to work drilling new wells. And more U.S. output will balance out some of the reduction by OPEC. Thus, global oil markets stand to remain well supplied, making a sustained price increase unlikely.

Advertisement

Natural gas prices continue to pull back, with the benchmark gas futures contract now trading at $3.17 per million British thermal units (MMBtu), down a few cents from last week. Mild weather across most of the country means heating demand should be minimal. And stockpiles of gas in underground storage are higher than normal for this time of year. Those storage levels will start growing now that the heating season is over, which should push gas prices down further. We look for gas to trade for about $2.75 per MMBtu by late spring.

Source: Department of Energy, Price Statistics