Gas Prices: Over the last year there has been very little volatility in the world oil market; the spot price of one barrel of crude oil has remained broadly stable around $70 to $80. Gas prices for the first half of 2010 averaged $2.75 per gallon (retail regular grade gas price) up from $2.34 for 2009 (annual average), though summer 2010 gasoline demand did not show any seasonal gains. In fact, prices declined by 10 cents per gallon between May and June. All the forecasting sources in ALG's consensus have lowered their outlook for oil prices since the last review in August. One notable change is to the Conning outlook which declined from $92 to $88 in 2011 and $112 to $104 in 2012 while the U.S. Energy Information Administration (EIA) also lowered their gas price outlook by 2 cents/gallon in 2013.
ALG increased the number of forecasting sources considered for oil prices; the consensus continues to indicate less inflation in oil and gas prices. Based on this information, ALG lowered the annual outlook for average retail regular grade gasoline in 2013 from $3.95 to $3.78 (Jan/Feb 2014 value of $3.87 is shown in the RVW4.0 workbench). On average, this has a positive impact on residuals, although there will be marked variations by segment – vehicles with low MPG ratings will be most positively impacted, while vehicles with high MPG ratings will be negatively impacted.
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