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Economic Forecasts

Gas Prices Have Crested

Kiplinger's latest forecast on the direction of energy prices


GDP 2.1% pace in '17, 2.4% in '18 More »
Jobs Hiring pace should slow to 175K/month by end '17 More »
Interest rates 10-year T-notes at 2.4% by end '17 More »
Inflation 1.4% in '17, down from 2.1% in '16 More »
Business spending Rising 3%-4% in '17, after flat '16 More »
Energy Crude trading from $40 to $45 per barrel in December More »
Housing Existing-home sales up 3.5% in '17 More »
Retail sales Growing 3.5% in '17 (excluding gas) More »
Trade deficit Widening 4% in '17, after nearly flat '16 More »

Gasoline prices continue their slow descent after the spike caused by Hurricane Harvey. At $2.62 per gallon, the national average price of regular unleaded is off about a nickel from a week ago, although it remains near its peak for the year after Harvey knocked Gulf Coast refineries off-line a few weeks ago. We look for the national average price to slip to about $2.50 per gallon by the end of September, now that refineries are up and running again. The end of the summer travel season also means lower demand — another factor that ought to push prices down. Diesel, now averaging $2.72 per gallon, will gradually trend lower in coming weeks, too.

Crude oil prices remain stuck in a narrow trading range in the high $40s per barrel. Benchmark West Texas Intermediate recently sold for about $49.50, up slightly from a week ago. In the longer term, we look for oil prices to decline to between $40 and $45 per barrel in December. Autumn tends to be a time of relatively weak demand for crude, and U.S. oil production keeps edging higher, which should weigh on prices.

Via E-mail: Energy Alerts from Kiplinger

Natural gas prices rose sharply to start the trading week, with the benchmark gas futures contract recently at $3.14 per million British thermal units (MMBtu), up about 20 cents from last week. As winter draws nearer and temperatures fall, heating demand will creep higher. And if weather forecasts hint at cooler-than-average temperatures, traders will start bidding up gas prices in anticipation of rising consumption. But odds are, gas demand will remain modest in the near term, as most of the country continues to experience mild to warm weather. Until colder conditions arrive in earnest, we look for gas prices to hold near $3 per MMBtu, as they have for many months now.

Source: Department of Energy, Price Statistics