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Four reasons gas prices are about to fall fast

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Mark Bugnaski/Kalamazoo Gazette/AP/File

(Read caption) In this August file photo, a man pumps gas into his van at a Speedway station in Kalamazoo, Mich. Last month, hurricane Isaac caused the biggest one-day jump in gasoline prices in 18 months, but several factors are poised to push gas prices back down.

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While U.S. gasoline prices have been on the rise for the past two months — and are presently $0.15/gallon higher than they were a year ago — I expect that gasoline prices will start to fall rapidly in the weeks ahead. There are four reasons for this.

All of these factors point to the strong probability that gasoline prices will fall regardless of any government action between now and the election. Of course there are always factors that could trump these. More hurricanes that keep capacity offline, an outbreak of conflict with Iran, and the terrible accident at Venezuela’s 645,000 barrel-per-day Amuay refining complex are all factors that would work to increase prices. But taking everything into account, the safe bet seems to be that gasoline prices will fall just as they normally do in the fall.

This does not even take into account the likelihood that the Obama Administration will release more oil from the Strategic Petroleum Reserve. This will be the topic of my next column.

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