Last week, I noticed many media outlets predicting $5 gas in 2012. It seems to have started from this post from GasBuddy. The theory goes that we have some of the highest gas prices we've ever had, and during the summer months prices typically get higher. This GasBuddy chart has the nation's average price at around $3.34 as of today. GasBuddy also says that prices typically peak at 93 cents from the start of the year. that would bring the average around the country to roughly $4.27, most likely in time for your Memorial Day vacation.
Where does the $5 come from? It seems that all the uneasiness and politics in the Middle East, particularly Iran, could lead to a slowed production of oil. That could raise prices. GasBuddy is even suggesting that oil prices could pass their high of $147 in 2008. While it seems that GasBuddy is the catalyst, CBS New York, CBS Baltimore, and ABC seem to be jumping on board with the possibility. Of course gas prices vary throughout the country, so if some places see $5 gas, others may avoid it.
So what can you about this? You can try to occupy your local gas station, but don't expect that to get gas prices lowered.
I see two things that you can do. The first is to look into these tips on saving money on gas. That's a no-brainer.
The second tactic is less obvious. If GasBuddy is right and the price of oil goes from around $100 today to the $150 record highs, you can make a lot of money by investing wisely. I have some money put aside in PowerShares DB Oil Fund (DBO). At that peak of oil price of $147 in July of 2008, the stock reached nearly $55 a share. It currently trades at around $30. If we see a similar trend, perhaps that stock jumps to between $50 and $60 a share. If so, you could nearly double your money.
As long as you invest enough, doubling your money would certainly ease the anxiety at the gas pump, right?
Who is up for a game of guess the peak gas price average (as reported by GasBuddy) this year? I'm going to go with $4.16. Leave your guess in the comments.
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