GasPredictor.com, a Web site providing short-term forecasts of changes in retail gasoline prices, predicts that retail gas prices in the United States will be in freefall for the last week of the year 2008. This Web site, which also publishes daily gas price predictions in an e-mail newsletter, is accumulating a perfect record of gas price predictions, and now has good news for the last week of the year: Cheap Gas!
This final week of the year may yet be the end of declining gas prices, GasPredictor.com warns, saying that longer-term factors point toward higher prices. However, the next few days, they say, will be a gift from the flailing economy.
Chuck Bonner, founder and lead analyst for GasPredictor.com, describes the factors pointing to a steep drop in gas prices: "For the past week, near-term futures prices in gasoline have been slipping down slowly, but retail prices have been creeping up in anticipation of the Christmas travel season. Suddenly, just hours before Christmas, the bottom is bursting open." Bonner says that there will be something of a correction, leading to some price increases just before New Years, but the pent-up downward pressure will take a few days to stabilize. "Gas up on Monday or Tuesday," Bonner says, "and you'll have a full tank of cheap gas to drive through the New Years weekend." Bonner quantifies the downward price pressure reflected in GasPredictor.com's forecasting algorithm, saying, "We're looking at what I'll call 26% downward pressure today, compared to pressures we normally see in the range of two to five percent. This is twice as strong as the highest downward pressure we've seen since we started publishing, and four times as strong as the upward pressure when prices increased two weeks ago."
GasPredictor.com usually only makes forecasts for one business day in the future. However, as Bonner explains, "Retailers decrease prices as slowly as they dare, so we're certain it will take them several days to adjust to the present imbalance." Nevertheless, Bonner is reluctant to make any prediction beyond the end of the year. "It's a guessing game beyond that, except you can always bet on prices to increase eventually!"
