I posted this last year in May or June:
It showed that after May or June, prices tend to fall. My guess is it will do that again this year.
I do find the price increase odd this year, however. We started the year with the Chicago Spot at an average of $1.2379 a gallon, and oil at $47.48 a barrel. That is 2.607%. This jumps to $51.01/$1.5514/3.041% in February, $47.77/$1.6327/3.418% in March, $54.50/$1.7347/3.183% in April, $59.37/$1.9318/3.254% in May, and $59.85/$2.0290/3.390% so far in June. I wondered how this compared to last year. It did go up percentage wise, but not as extreme as this year. Going January to June: 2.646%/2.697%/2.816%/2.784%/2.813%/2.841%. The good news is, July was 2.645%.
The reason I bring this up, is there is something that happens every year that can cause these spikes up, and that is the switch to summer blend (probably along with more consumption). That’s what I thought I was seeing this year. But it’s a bigger jump this year. Refinery issues could be the reason (look at that spike up in August and September in 2012 for the same reason). With prices being about half of what they were, we could also be seeing January of last year as an anomaly. With the base cost of refining staying the same, that could be the reason it’s a higher percentage this year than last.
I don’t see $4 coming anytime soon. I don’t see $3 either, although it’s a lot more possible than $4, and if it does, it shouldn’t last long. Supply is still up, consumption is still down. Those variables aren’t going to change much anytime soon, with consumption on a continuing downward trend. That, and the fact the price usually peaks, then falls the rest of the year, means doomsayers can relax a little.