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Economic Forecasts

Gasoline Prices Heating Up

Kiplinger's latest forecast on the direction of energy prices

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GDP 2.9% pace in '18, up from 2.3% in '17 More »
Jobs Slower job gains likely this year as labor market tightens More »
Interest rates 10-year T-notes at 3.3% by end '18 More »
Inflation 2.6% in '18, up from 2.1% in '17 More »
Business spending Up 7% in '18, boosted by expanded tax breaks More »
Energy Crude trading from $65 to $70 per barrel in July More »
Housing Price growth: 5.0% by end of '18 More »
Retail sales Growing 4.4% in '18 (excluding gas and autos) More »
Trade deficit Widening 5%-6% in '18 More »

Travelers are in for a painful stop at the gas pump this holiday weekend. The national average price of regular unleaded now stands at $2.93 per gallon. That’s the highest for this time of year since 2014 and is up more than 50 cents from this time last year. And with demand so high because of the road warriors’ weekend, there’s a good chance that the national average will hit $3 before it’s over. Diesel prices are also up significantly, with a $3.19-per-gallon national average.

You’ll encounter the highest prices in the West, where drivers are probably longing for gas at “only” $3. California’s statewide average is up to $3.71 per gallon, for instance. Drivers in the South, by contrast, can expect to pay the least. In Mississippi, the statewide average is just $2.62, which is the lowest anywhere, according to travel website AAA.

Via E-mail: Energy Alerts from Kiplinger

Crude oil prices remain elevated, with U.S. benchmark West Texas Intermediate recently trading near $72 per barrel. Concerns about supply disruptions in Venezuela, plus the renewal of U.S. sanctions on Iran’s oil exports, have driven up WTI by more than $5 per barrel over the last month.

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But we look for oil prices to cool off slightly this summer. Rising production in the United States should help offset lost production elsewhere. And the steep climb in gasoline prices will nudge consumers to drive a bit less, taking some pressure off demand. Look for WTI to trade from $65 to $70 per barrel in July.

Natural gas prices continue to fluctuate slightly below $3 per million British thermal units (MMBtu). The benchmark gas futures contract recently traded at $2.90 per MMBtu — little changed in months. Sustained hot weather could fire up electricity demand as air conditioners work harder, which would likely push natural gas prices higher. But barring a real heat wave, don’t expect them to climb much above $3 per MMBtu anytime soon.

Source: Department of Energy, Price Statistics