Where Analysts Think Oil Prices Are Headed This Year

by Jon LeSage, edi­tor, Used Car Mar­ket Reports

It’s get­ting trick­i­er to pre­dict the price per bar­rel of oil and its direct cor­re­la­tion to gaso­line and diesel prices – much more so than in the 1970s when the Orga­ni­za­tion of Petro­le­um Export­ing Coun­tries (OPEC) could instant­ly throw a wrench in the gears.

Volatile mar­ket con­di­tions still play a part, such as an upris­ing in a Mid­dle East nation.

As for this year, three lead­ing ener­gy agen­cies have report­ed that pro­duc­tion out­side of OPEC should be increas­ing this year – with much of that com­ing from US shale fields.

There’s also the poten­tial of Iran, Iraq, and Libya ramp­ing up pro­duc­tion.

Oil prices dropped down to near $92 per bar­rel on Mon­day after the announce­ment that Iran has made an agree­ment to imple­ment a six-month inter­im on its nuclear pro­gram. Some eco­nom­ic sanc­tions on Iran will be eased as the coun­try agreed to lim­it its ura­ni­um enrich­ment and to allow inter­na­tion­al inspec­tors to access its nuclear facil­i­ties.

Black Book’s Ricky Beg­gs expects to see gaso­line prices in the US reach a high point some­where in the $3.75 to $3.85 range, but it looks like the pat­tern should be sim­i­lar to the past two years. From mid-Decem­ber to mid-Feb­ru­ary, gas prices sprang up but then reced­ed. Gas pump prices aver­aged $3.49 last year and this year should be sim­i­lar.

What’s that mean for new and used vehi­cle prices this year?

Beg­gs thinks gas prices aren’t high enough to bring back used vehi­cle prices on entry lev­el cars, hybrids, or elec­tric vehi­cles.

Pick­up trucks should con­tin­ue doing well in new and used sales, and there are a lot of new roll­outs on the pick­up side, such as the new Ford F150 being shown at the Detroit auto show.

Cor­po­rate aver­age fuel econ­o­my con­tin­ued to drop in 2013 and that could con­tin­ue this year – giv­en the fed­er­al man­date to reach fuel econ­o­my tar­gets.

Trucks are start­ing to see more fuel effi­cien­cy, as well, such as the new Ford F150 with a lot more alu­minum and being 700 pounds lighter. It’s more fuel effi­cient and is the top sell­er for Ford. GM and Chrysler are being more com­pet­i­tive about its truck mod­els offer­ing more fuel effi­cien­cy, too.



    Leave a Reply

    Your email address will not be published. Required field are marked *.