But according to a report in USA Today, the worst may be over. “By the behavior of the market, things are just running out of steam,” the paper quotes Patrick DeHaan, senior analyst for the pricetracker gasbuddy.com. “Barring any major event – refinery problems, Iran – I think prices have peaked.”
That peak was a $3.92 per gallon average nationally this week, slightly higher than our region’s average, which generally trails the nation’s.
If DeHaan and other analysts are right, that’s a big boost to the prospects for continuing economic recovery. Just as consumers regained some confidence, gas prices took off, threatening to dampen down the enthusiasm and impede economic growth. Virtually everything in the economy, after all, is affected by fuel prices, since products and materials have to be transported and people have to get to work.
Northeast Mississippi is a place where commutes are even longer than in many city-suburban metroplexes. Lots of people in our region drive fairly long distances to their jobs, and public transit is virtually non-existent.
The recent gas price surge has been an unusual segment of a continuing roller coaster ride. This latest upward price push wasn’t due to a big increase in demand or supply shortages or even the usual high-driving time arrival. In fact, demand has been down. In the U.S., people are actually driving fewer miles.
But instability in the Middle East and other international events fueled speculation in the futures market that helped push prices artificially high.
Stability doesn’t necessarily mean prices will fall significantly, though DeHaan predicts they could drop to around $3.70 in May. The federal Energy Information Administration projects a $3.95 average through the summer. But the direst of the predictions – of gas soaring to $5 a gallon and beyond this year – now seem way off base.
Yes, Europeans would be happy to have $5 gas. We’re a bit spoiled by the expectation that gas prices will stay low, and what seems high to us isn’t to the rest of the world. But this country’s not Europe, and the U.S. certainly relies more heavily on automotive transportation for simple reasons of geography and population density.
Even with controversies like the Keystone pipeline much in the news, a high level of domestic oil production is currently in progress. That needs to continue – with appropriate environmental safeguards – along with development of alternatives.
For the time being, America is oil-dependent, but efficiency in its use and diversification in available energy sources is the prudent and sensible path.