Gas Prices Expected to Hit 5-Year High

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Gas prices for 2017 are expected to reach their highest point since 2012, which may cost drivers up to $52 billion more than in 2016, reports KARE 11.

The average price of regular unleaded gas is expected to reach $2.49 per gallon in 2017. It was $2.13 in 2016 and only $1.99 a year ago. This increase will be a departure from the usually steady decrease in rates that consumers have seen over the past four years.

“This is removing $52 billion in one year’s time from motorists’ wallets,’’ Senior petroleum analyst Patrick DeHaan of GasBuddy.com, a website based around finding cheap gas in an area, told KARE 11, “Some motorists have been saving and putting into the bank whatever they’re not spending on fuel. And … it may be an expense that creeps up on them and causes them to cut back in other areas.’’

The Organization of the Petroleum Exporting Countries (OPEC) has played a key role in both the declines and now increases in gas prices. Two years ago, OPEC announced its members would seek to produce as much crude oil as they could. This flooded the market and drove down prices.

In November, OPEC decided to reduce its production. Since then, it has also successfully convinced Russia and several other major oil producing nations not in OPEC to do the same.

Experts predict that gas will be at its cheapest in 2017 in February, at an average price of $2.32 per gallon. This is cheaper than Tuesday’s nationwide average of $2.35 reports KARE 11. The high mark for 2017 will be in May at $2.67 per gallon. These months traditionally have the lowest at highest price marks in any given year.

The increased prices are likely to incentivize the reactivation of U.S. based refineries which have been dormant during the low price points. The added production on the U.S. side may keep prices from climbing back to 2014’s national average of $3.34 per gallon.

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