Will gas prices ease this year?
EAGLE COUNTY – When it comes to gasoline, Ed Oyler is at the very end of the hose.
Oyler, who owns the Sinclair gas station in Eagle, said he hears just about every day from people grousing about the price of gasoline – which was right at $4 per gallon Tuesday. He’s gotten to the point where he’s willing to show his latest profit and loss sheet to just about anyone who wants to see it.
“I lost money last month, and I’m probably going to take a loss again this month,” Oyler said.
Ty Sterkel, one of the owners of Performance Automotive in Eagle, said the problem is that the higher gas prices go, the tighter retailers’ profit margins get.
Gasoline has had a serious run-up in price this year – the average price of a gallon of regular in Avon is 33 cents higher than it was six months ago. And the increase happened quickly.
“There were times when it got more expensive just about every day,” Sterkel said.
The odd thing about prices at the moment is that the price of domestic oil is less than $110 per barrel. When gas pushed through the $4 barrier in 2008 – topping out locally above $4.50 per gallon – the price of U.S. oil was pushing $150 per barrel.
The difference between then and now is refinery capacity – and profit.
Tom Kloza, the editor-publisher and chief oil analyst for the Oil Price Information Service, which provides price data to AAA and other companies, said he’s currently predicting that gas prices nationwide will settle in somewhere between $3.75 and $4.25 per gallon and then hold for at least several months.
His feeling is that gas will end up toward the lower end of that price range.
With the exception of some traditionally high-priced areas, “I don’t believe the nonsense about gas being $4.50 to $5.50 this summer,” Kloza said. “I suspect we’ll see prices this summer similar to last summer.”
The good news is that, at least so far, Colorado has had some of the lowest average gas prices in the country during the recent rise in prices. That’s been helped by Colorado having several refineries, fed by pipelines from domestic and Canadian producers, so prices haven’t had the big rises seen in California and other areas.
Of course, there are perhaps a half-dozen potentially market-changing monkey wrenches that could be thrown into the gears of the world’s energy system at virtually any moment, including the never-ending threat of Iran’s leaders doing something disruptive in the Persian Gulf.
But absent those monkey wrenches, Kloza said the price of oil seems to be stabilizing at the moment.
And, in the wake of previous price increases over the past four years, Kloza said Americans really are adjusting their driving habits. Nationwide, gasoline deliveries are lower than they’ve been in several years.
That change in habits is something Oyler sees in Eagle.
“You see it in the in-house accounts we have,” he said. “People are being more careful about the driving they’re doing.”
But people still grouse about the prices. That’s a wound that Oyler said is at least partially self-inflicted.
“We’re the only business I know of that throws a big sign up outside with their prices,” he said.
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