Gas Prices to Hit $5 a Gallon, says Goldman Sachs

Gas prices reach five dollars per gallon at a gas station in Washington, DC on April 19, 2011. Unrest in the Middle East and price speculation have steadily led to higher oil prices and consequently higher gas prices throughout the year so far. UPI/Roger L. Wollenberg

Gas prices could rise to $5 a gallon this summer, Goldman Sachs predicts.

The New York Post reported Sunday that Goldman estimates oil could reach $135 a barrel by mid-July, with the corresponding price of gasoline hitting $5 a gallon.

However, there is little evidence to support this. Oil has fallen to $100 a barrel this spring, and fallen demand has helped to keep prices down as well.

"We should be seeing some big declines at the gas pumps after Memorial Day," energy analyst Peter Beutel of Cameron Hanover told the Post. "Wholesale prices have been dropping, and that could cause some serious revisions downward at the pumps," he said.

Over the holiday weekend, the national average gas price was $3.80 a gallon.

Traditionally, gas demand rises during summer, and political unrest in the Middle East could stir up enough trouble to make Goldman's prediction come true.

"Drivers try to do what the can, but they have to go almost all the places they go," energy research David Greene of the Department of Energy web site told the Post. "There's no magic gizmo that will drastically change someone's gasoline use."

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