While consumers are beginning to face what appear to be higher borrowing costs, they may be getting some relief in prices at the pump. The chart below shows the historical average price of gasoline (according to AAA) going back to the start of 2011. In May 2011, prices at the pump peaked just shy of $4 per gallon. Then, in April 2012, gas prices rallied again but were a nickel shy of their highs from the year before pulling back.
Five months later, in September 2012, gas prices rallied again. But this time they peaked at $3.87 per gallon, or seven cents shy of the prior high. In the rally that ended in late February, gas prices peaked at $3.79 per gallon, which was eight cents short of the September highs. Finally, in the most recent rally gas prices got up to $3.66 before pulling back. In this case, prices at the pump peaked 13 cents below the February high.
Noticing a pattern? Each time gas prices have risen, the rallies have been met with selling below the prior highs. Additionally, with each rally the spread between the prior high and the current high has gotten wider and wider. Not a good pattern if you are long gasoline futures, but if you are a consumer this kind of pattern should be music to your ears.