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- 29 Sep
What are the different factors influencing gas prices right now?
On the online Convenience Store Decisions site today there is an excellent article written by Brian Milne, the Energy Editor of Schneider Electric. In the article Mr. Milne outlines the various factors influencing the expected price of gasoline through the rest of this year. Here is the list of influences going on right now:
Downward pressure:
- Seasonal decline in demand from August to September, as expected every year
- The move to a higher Reid vapor pressure specified gasoline, which is less costly for refiners to produce
- Growth in global crude production from the US, the North Sea, Libya, and Iraq
- Slowing growth in the China economy means weaker demand
Upward pressure:
- Refinery outages in the Gulf Coast and eastern Canada which supply the US Northeast
- The world traditionally uses the most oil during the fourth quarter leading to increased demand
Mr. Milne concludes that the only certainty in gas price predictions is the uncertainty. While it remains a safe bet that retail fuel prices will continue to decrease through the end of 2014, it may not be to the low levels that some predict. And from a fuel price management perspective, whenever we say declining retail fuel prices, we can insert rising retail fuel margins, since the opposite trends go hand in hand.
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