Are the gas pains almost over? It’s possible, experts tell News Radio 1200 WOAI.
The price of gas in San Antonio has been on an upward trajectory, rising more than 20 cents just in the past month, to an average today of $2.70 per gallon. That is 50 cents more than this time last year, the the most expensive price we’ve payed going into June since 2014.
But Patrick DeHaan, an analyst with GasBuddy.com, says there are indications that we are reaching the peak.
“If everything goes our way, if OPEC does increase productions, and our allies don’t follow out lead on sanctions with Iran, we could fall back to $2.50 a gallon,” DeHaan said.
He says the price of West Texas Intermediate, which soared past $70 a barrel just last week, is now down into the upper 60s, due largely to comments by Saudi Arabia that they plan to increase production. An agreement between OPEC and the Russians to reduce production to raise prices has been in place for more than a year, and is a main reason why pump prices have been rising, but experts predicted that it would be only a matter of time before the Saudis, who rely on oil sales for nearly 100% of their foreign income, decided to grab the cash in the form of higher prices.
DeHaan says this is about the time of year pump prices usually peak anyway.
“Prices have peaked as early as April and as late as June, so if we see prices peaking in the coming few days, which is possible, we would be going right along with what has been normal with gas prices.”
But, as usual, don’t expect prices to fall nearly as rapidly as they rose. In a tradition that economists call ‘sticky pricing,’ commodity sellers frequently lose money when prices are rising, so they hold back on lowering the price when prices fall, so they can make up that lost revenue.