Colorado Springs-area gas prices have dropped to a nearly three-month low in the days ahead of this week’s Fourth of July holiday, which is good news for motorists heading out for fireworks, picnics and other Independence Day events.
Even so, rising Middle East tensions and uncertainty over a trade deal between the U.S. and China could send prices higher in the next several weeks, one national expert says.
Pump prices averaged $2.616 for a gallon of regular unleaded Monday afternoon in the Springs, according to GasBuddy.com, the online service that tracks gas prices nationwide. The price is based on GasBuddy’s survey of 246 area gas outlets.
Also according to GasBuddy:
• Local prices are at their lowest point since mid-April, and are about 15 cents cheaper than a year ago at this time. Strong gas inventories have contributed to lower prices.
• Prices were higher statewide, averaging $2.673 a gallon Monday.
• Nationwide, prices averaged $2.723 a gallon.
Patrick DeHaan, GasBuddy’s Chicago-based head of petroleum analysis, said global events could spur rising prices this summer.
A successful trade deal between the U.S. and China — although still an uncertainty — could ramp up demand for oil and gas and contribute to higher prices, he said.
But the acrimony between the U.S. and Iran, in particular, is something to watch, DeHaan warned.
Iran attacked an oil tanker and shot down a U.S. drone, which prompted President Donald Trump to come close to ordering a retaliatory military strike before he backed away, DeHaan said. Oil prices in recent weeks have risen by $8 a barrel.
“Especially with the oil tanker attack,” he said. “We’ve seen now Iran has less to lose and is becoming more unpredictable in a waterway (the Straight of Hormuz) that sees 20 percent of global oil production flow through it.”
Those confrontations could trigger even higher oil prices and rising fuel costs for motorists.
“Retail gas prices in Colorado Springs, we’ll probably start to see them go back up,” DeHaan said. “They dropped 3 cents in the last week and now they’re kind of stable at $2.62. I think we will see some kind of bump up.”
Local gas prices, however, probably won’t increase as high as $3 a gallon, he said. Oil refineries serving the Rocky Mountain region have been operating at capacity and producing ample gas supplies.
“So supply is healthy, and that could soften the blow from a rise in oil prices if Rocky Mountain refineries continue to operate at close to 100% of capacity,” DeHaan said. “Of any region in the country, it would seem like refineries in the Rockies operate the most efficiently, (with) the lowest amount of unplanned down time ... That could help mitigate higher gas prices as a result of higher oil.”