SALT LAKE CITY — Gas prices in Utah and the rest of the West may still be higher than the national average, but that trend is expected to change in the not so distant future.
Fuel analysts are predicting falling prices in the Beehive State could approach the $2 per gallon level by year’s end, but it likely will not happen right away.
“It may be one or two months before Salt Lake City assumes its more normal role,” said Patrick DeHaan, GasBuddy.com senior petroleum analyst.
The amount of tax on gas and regional factors at refineries can have significant impacts on the price consumers pay at the pump, DeHaan said. Unfortunately, in the Rocky Mountain West, maintenance issues at the Sinclair facility in Wyoming have resulted in “pressure on prices,” he explained.
However, there is potentially good news on the horizon.
“Once that clears out, eventually Salt Lake City prices will return more to normal,” DeHaan said.
Barring any unforeseen circumstances, consumers should expect to see local fuel prices in the $2 to $2.25 per gallon range for regular unleaded by the fourth quarter 2015, he said.
“You may see some (gas) stations under $2 a gallon by Halloween,” DeHaan said. “Then you could see the average price getting closer to the $2 a gallon mark by the end of the year.”
GasBuddy.com reported Monday that prices have continued to decline nationally amid oil price volatility, with five states reporting per gallon averages of less than $2, including South Carolina at $1.89, Mississippi at $1.92, Alabama at $1.95, Louisiana at $1.98 and Tennessee at $1.99.
"The national average gasoline price had a solid decline in the last week thanks to renewed pessimism in the oil patch after the Fed's decision to hold interest rates steady," DeHaan said. "While three Midwestern states — Indiana, Ohio and Michigan — saw modest hikes associated with a continued behavior of spikes and ebbs, the rest of the nation's 47 states saw gasoline prices declining.”
Nearly 1 in 4 stations are now selling gasoline under $2 a gallon, and that rate is expected to climb in the weeks ahead, he added.
“With much of the country now on winter gasoline, there is less pressure on prices during the upcoming fall maintenance season at the nation's refineries,” DeHaan said. “I continue to believe that the national average will fall under $2 per gallon, perhaps even sooner than expected."
He said $1.99 remains the most common price for regular fuel across the United States, a stark contrast to the landscape a year ago when every gas outlet was selling fuel for more than $2.50 a gallon and almost 96 percent of stations were selling at over $3 per gallon.
However, the current average gasoline price of $2.28 per gallon is the lowest since 2004 when pump prices on this date averaged $1.85 per gallon.
In the near term, motorists on the West Coast are likely to see some of the larger declines yet to come as ExxonMobil tries to bring its Torrance, California, refinery back online, DeHaan said.
In addition, areas of the West have yet to switch to cheaper summer gasoline, which generally is accompanied by further declines, he said.
Barring any major shifts in oil markets, gasoline prices are expected to continue moving lower in the days ahead driven by supply and demand.
Demand for motor gasoline weakens during the autumn while leading to increases in gasoline supply, putting continued downward pressure on pump prices, DeHaan explained. Meanwhile, areas of the Midwest that had seen prices hike last week will likely see prices again moving down, following their traditional price cycling behavior, he said.
On the national front, oil prices are still a significant wild card as questions remain about Iran, China's economy, the Federal Reserve's decision on raising interest rates, along with oil and gasoline inventory data.
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