Future of gas prices depends on fiscal cliff
AAA is seeing gas prices rise as 2012 closes out, but the fiscal cliff will play a part in determining if prices continue their climb upwards.
AAA believes that If a resolution to avoid the fiscal cliff is implemented by congress, motorists are likely to see pump prices increase for an extended period of time. Positive news is sure to create economic optimism in the market. However, if the economy falls off the cliff due to a lack of legislation from congress, prices will most likely retreat on speculation and fuel demand will fall even further than it has in the past few months.
Oil prices are holding steady around $90 a barrel as a deal on the fiscal cliff remains unknown and U.S. gasoline stockpiles are at a nine-month high as demand continues to wane according to AAA.
"Almost everything is riding on whether or not a deal is made to avoid the fiscal cliff," said AAA spokeswoman Jessica Brady. "If the fiscal cliff is not avoided and the economy falls back into a recession, we're sure to see gas prices drop as fuel demand recedes. If a plan is put into place, gas prices will likely continue to increase throughout January, however it's doubtful we will see an immediate spike in fuel demand."
(Gas prices courtesy of AAA)