Blog #12: Gas prices, now averaging $3.92 a gallon, may have peaked

 This article discusses the average gas prices this year compared to in the past. In the past, the gas prices have peaked shortly before memorial day. But according to senior analyst Patrick DeHaan, "By the behavior of the market, things are just running out of steam; barring any major event — refinery problems, Iran — I think prices have peaked." He also said that the national average would lower to 3.7 dollars a gallon by early May. On the other hand, the federal Energy Information Administration predict that gas would peak at 4.01 dollars in May and average at around. 3.95 dollars a gallon in September. There is also optimism that the political tensions with Iran — which boosted crude oil prices by $15 to $20 a barrel on speculative trading — could soon ease, Milne said. Gas prices in some of the nation's priciest markets, such as Los Angelas and Chicago, have already dropped 12 to 20 cents a gallon. That adds "confidence that the overall market is heading down," said industry tracker Trilby Lundberg of the Lundberg Survey. "Even if demand were to surge, we have flush supplies, a lot of refining capacity and repeated assurances that Saudi Arabia would step in and hike production if there are problems with Iran."

I think that this article is very optimistic that there are predictions of the oil prices going down. It does not seem that way at all right now. The only way I see the oil prices going down is if there is a switch over to another energy source, like how Iran is planning to switch over to nuclear soon. If the demand for oil decreases (in places like the United States), the supply will increase (due to other countries cutting down their use of oil) and therefore the price level will fall. It will be interesting to see how accurate their predictions are when we are in the month of May and September.

http://www.usatoday.com/money/industries/energy/story/2012-04-10/gas-price-surge-appears-over/54160854/1