A Saving Summer
Hopes Run High
Larry Jewett - June 06, 2013 10:00 AM
firstthoUght larry Jewett
It’s no surprise that many fortune tellers have a hard time drumming up business in communities across the country. It seems like just about everyone wants to get in the business of predicting the future.
Everyone had something to say about Punxsutawney Phil and his dismal miss when predicting an early spring, only to face a seemingly never-ending winter. Those who live in coastal regions in the eastern half of the U.S. brace for the prognostication on the hurricane season (which usually originates from meteorologists based in the Rocky Mountains), predictions which seldom pan out.
Predictions based on anticipated conditions often rely on historical data that could indicate patterns. Of course, patterns are often victimized by elemental aspects that cause the prediction to wobble off the centerline. Predictions of spending forecasts have to consider supply and demand, general economic climates and perceived need of goods or services. Predicting can be a bold enterprise with great upside when right and little downside when wrong. After all, failure is expected, so failing is not a big deal.
The U.S. Energy Information Administration has released a short-term forecast that indicates the cost of gasoline is going to go down in the summer. This is one of those prognostications that we can root for.
The projection is based on a decline in crude oil prices (an area that fluctuates so often it makes predicting more difficult), a reduction in consumer demand (a fact that has been relevant for several years) and an abundant supply of gasoline.
Based on their assessment, we’re in kind of a buyer’s market, but not so much that we can drive down prices significantly. Then again, any reduction has the tendency to translate to more in the pocketbook.
The U.S. Energy Information Administration believes the entire country will feel the effects, but some parts will feel it more than others. As you can see by the graph provided, the overall average is going to reflect a reduction of six cents, which doesn’t sound like a lot, but it is a start. Those who live on the West Coast can expect to see prices down more than twice that amount, pushing below the $4 mark and even below $3.90. The bad news with that is the fact that it is well above the national average. The region with the lowest cost is expected to be the Gulf Coast. While it has the smallest decrease, it will continue to lead the way with respect to lowest average cost.
According to the EIA information, the crude oil prices provide one of the greatest motivators to the prediction. Crude oil prices amount to two-thirds of the price that consumers pay at the pump. A barrel of oil that will be used to produce gasoline for consumers during the summer months was selling for about $1.50 less than a year ago.
The inventory of available gasoline is about the same as the five-year average, slightly higher than last year. The demand, however, is projected significantly lower, nearly half of the previous year. Sources say the fuel efficiency of cars on the highway is the biggest factor, not a significant reduction in the amount of miles being driven.
While no one will likely populate a savings account with the perceived savings, the news, if true, can be heartening. Summertime shows stand to gain more enthusiasts who will drive farther to enjoy the events. Those with cars suited for the use will get them out for more cruises. Those two events alone will allow us to see and enjoy the cars in the manner in which they are intended.
If they are wrong in their forward thinking, they can’t be wrong to the extent that they have much impact. Our gas consumption should not be a motivating factor in enjoying cars, though it could have an effect about how much. The bottom line is that we all need to enjoy our cars and the summer is the perfect time to do it.