Gas prices may head lower soon
Analyst: Demand will fall after Labor Day, put pressure on price
CHAMPAIGN — Aside from a possible bump up this weekend, look for gas prices to head steadily lower in the period between Labor Day and Thanksgiving, a gasoline analyst said.
Gas prices in the Champaign-Urbana and Danville areas dropped about 6 cents a gallon this week to an average of $3.39 a gallon Thursday. That was about 6 cents lower than a year ago at Champaign area stations and 11 cents lower than a year ago at Danville area stations.
Prices on Thursday were slightly lower to the south and southwest, with stations in the Monticello, Sullivan, Mattoon and Charleston areas typically selling regular unleaded gas for $3.27 to $3.29 a gallon.
A small fire and explosion Wednesday night at BP's refinery in Whiting, Ind., posed the possibility of a wholesale price increase, but Patrick DeHaan, a senior petroleum analyst at gasbuddy.com, rated chances of that at "50-50." If it does come about, it's conceivable local prices could jump to the mid- to upper $3.50s, he said.
But if it happens, it's not likely to last for more than a week or two, he said.
"With the conclusion of Labor Day, we're looking at lower gasoline demand, and that will likely put more downward pressure on prices," DeHaan said.
Prices are expected to move lower in September, even lower in October and still lower in November, DeHaan said.
"For Champaign, the price close to the end of September will probably be $3.20 to $3.35 a gallon. By the end of October, it could be $3.10 to $3.25 a gallon, and by the end of November, we could be looking at $3 to $3.15 a gallon," DeHaan said.
"We could see some stations briefly go under $3 (a gallon), but those would be more isolated stations in the period after Halloween but before Christmas," he added.
Of course, there are a few factors that could undermine those projections.
"Some of the caveats are hurricane season (which could jeopardize production at Gulf Coast refineries) or a huge (refinery) explosion," he said. "Geopolitical tensions haven't had an impact so far, but we'll have to watch."
DeHaan said forecasts call for hurricane season to be "a little quieter" than some years, but he said the accuracy of those forecasts has been spotty.