Where do gas prices go next?

A few critical factors will govern how far gas prices fall from last week’s record levels.

Gasoline prices have begun to ease, but even when all Gulf Coast refineries are running again later this year, consumers may not see a full retreat to pre-Katrina levels.

That conclusion, analysts say, stems from a simple equation involving the cost of a barrel of crude, markups by middlemen, and little margin for error in the nation’s energy infrastructure. Across the country, gasoline prices soared into uncharted territory – above $3 per gallon last weekend – stunning motorists and prompting many to shorten or skip Labor Day trips.
Concerns about price gouging by gas stations are being investigated in state capitals and the halls of Congress. Prices have already begun to pull back, as some refineries and long-distance pipelines affected by hurricane Katrina return to full strength.

How far and how quickly prices fall now depend on a few critical factors: when four damaged refineries come back on line, how quickly emergency shipments of gasoline from foreign refineries arrive, and most important, where oil prices go from here.

Christian Science Monitor