Sharp gas price runup unlikely, research firm says

Anemic domestic gasoline demand and historically large fuel stocks are among the factors that will keep retail fuel prices this year below 2011 levels, according to two industry forecasts.

Independent research firm Lundberg Survey Inc. predicted retail pump prices would be $3.50 on average nationally.

Elevated U.S. unemployment levels expected through 2012 will temper strong growth in U.S. gasoline demand, the Camarillo, Calif.-based firm said in its twice monthly newsletter released Monday. The Energy Information Administration reported last week domestic gasoline stocks stood at more than 230 million barrels, which the report described as "more than ample."

Trilby Lundberg, publisher of the newsletter, said the 81.8 percent operating rate for U.S. refiners would be worse if not for fuel exports. However, announcements of refinery closures doesn't meant that overall domestic fuel supplies will be tight or that prices will respond by sharply rising.  

Even with fears of Iran attempting to curtail exports, the newsletter said Saudi Arabia is capable of filling the void and told customers it would use its ample spare capacity.

In the last 13 years, the average retail gasoline price has increased 44.1 cents per gallon on average between January and June. The average hike over that time would put the 2012 average price in the United States at $3.57 per gallon in June.

The Energy Information Administration said Tuesday it expects regular-grade motor gasoline to cost drivers $3.55 per gallon on average at the pump this year and $3.59 per gallon in 2013. The EIA estimated there was a 20 percent likelihood gasoline prices will reach $4 a gallon or higher this spring.*

The independent government statistical agency also said the price for West Texas Intermediate crude oil, a common U.S. benchmark, would average about $100 per barrel in 2012, which would be about $6 per barrel higher than the average price last year. 

The crude oil price makes up more than 70 percent of the retail gasoline price, the newsletter said. 

*Editor's note: This story has been corrected from an earlier version. The EIA said there was a 20 percent chance gasoline prices would reach $4 a gallon or higher this spring.