Will Gas Reach $5 Per Gallon?
With gas prices still going up and summer yet to hit, many economic analysts are asking if $5 per gallon gasoline is on the horizon. Already, stations in the West are inching forward to that mark, but the national average is still just below $4 per gallon. What should we make of it?
Some analysts are saying it’s possible. Still others are saying it won’t happen. Federal Reserve Chairman Ben Bernanke is one of those saying it isn’t likely. Can we take that to the bank?
I think a lot of that depends on how the Middle East reacts to Osama bin Laden’s death. It will likely have a positive impact on gasoline prices worldwide. But what will it do at the pump?
Americans’ travel patterns will likely be a bigger factor in pump prices this summer. If fewer Americans travel, particularly by privately owned vehicle, then fuel prices will likely stabilize. If Americans continue to travel by car, spending their money on the rising gas prices, then that will continue to drive prices higher. Then we could see $5 per gallon gasoline.
So the question is, will Americans travel more or less? I think less. As prices rise, Americans travel less and buy less gas. They don’t fill up as much and that steadies fuel prices.