Enjoy buying gas for $1.75 while you can, because GasBuddy.com, in projections released today, says the national price could surge back to $3 a gallon by May, and GasBuddy says $2.75 is not out of the question in Texas, News Radio 1200 WOAI reports.
Analyst Patrick DeHaan says his projections are based on an expectation that the Trump Administration and China will reach agreement on a framework for a trade agreement, which will boost the global economy and end the tariff wars which have helped push down the stock market in recent weeks.
"There will likely be some sort of trade mechanism which will improve economic prospects and lead to high oil prices at the same time that OPEC has been cutting production," DeHaan told News Radio 1200 WOAI.
He says the U.S. average price of gasoline never reached $3 in 2018, hitting a high of $2.98 in late May.
He says Texas prices should be lower than the national average, as they frequently are, due to the proximity of the refineries to the local gas stations, which cuts down on transportation costs
.“While the bargain basement gas prices we’ve been seeing in areas across the country have been terrific and most welcomed, the party at the pump will likely wrap up in the next month or two, and prices will begin to rally as OPEC production cuts and a strong U.S. economy push gas prices back up," DeHaan said.
And while he says Texas shale will reap the benefits of higher prices, he says Texas won't be able to reap all the benefits, due to continuing challenges with adequate pipeline capacity to move large amounts of oil to refineries.
"There is not enough pipeline capacity to adequately move some of these barrels," he said. "There is going to be some capacity which is unused due to pipeline constraints."
The prediction is good news for the Texas economy as the 2019 Legislative session begins next week. Current prices of oil are falling to the point where they could make expanded production unprofitable for new well drilling. Oil and gas taxes are one of the main sources of revenue for state government.