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Economic Forecasts

Gas Prices Continue Their Climb

Kiplinger's latest forecast on the direction of energy prices

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GDP 2018 growth is 2.9%; 2.5% for 2019 More »
Jobs Job gains will be around 180,000 per month in 2019 More »
Interest rates 10-year T-notes at 2.9% by end ’19 More »
Inflation 2.2% in ’19, up from 1.9% in ’18 More »
Business spending Up 5% in ’19 as global growth slows More »
Energy Crude trading from $55 to $60 per barrel in June More »
Housing 5.35 million existing-home sales in ’19, down 0.4% More »
Retail sales Growing 4% in ’19 (excluding gas and autos) More »
Trade deficit Widening 7%-8% in ’19 More »

Another week, another notch higher for prices at the gas station. The national average price of regular unleaded climbed seven cents from a week ago to reach $2.56 per gallon. Gas now costs 22 cents more on average than it did a month ago. And the national average price matches exactly its level of one year ago. That’s in sharp contrast to earlier in the year, when prices were running below their year-ago levels. We look for the increase to continue, with the national mean soon cresting to $2.60. By Memorial Day, a price of $3 or more is possible. Diesel is also up, with the national average price at $3.01 per gallon. It will keep climbing too, but at a slower pace.

Oil prices continue to rally. U.S. benchmark crude is on the cusp of $60 per barrel. A few months ago, it was trading near $43. Moves by OPEC and Russia to reduce exports have sent oil prices soaring. At the same time, drilling activity in the United States has fallen, which points to less domestic production on the horizon. Crude prices may well climb past $60 in the near term, though if they do, we expect them to then pull back a bit by late summer.

Via E-mail: Energy Alerts from Kiplinger

Natural gas prices remain stuck in a narrow range just below $3 per million British thermal units. If cold weather lingers in the Midwest and Northeast this spring, a brief price spike wouldn’t be surprising, since gas stockpiles have been heavily depleted this winter. But sooner or later, mild weather will cause a significant cutback in gas demand, and stockpiles will start growing again. That should keep the benchmark gas futures contract trading at or below $3 this spring.

Source: Department of Energy, Price Statistics