Retail gasoline prices may have peaked
By Tom Stundza -- Purchasing, 5/26/2009 10:27:00 AM EDT
The retail price of gasoline may have peaked at $2.43/gallon over the Memorial Day weekend, according to government and independent economists who see prices slipping through summer and autumn.
The national average for unleaded regular gasoline prices at $2.43/gallon this morning has brought the month-to-date average to $2.24, or 20¢ more expensive than last month. With millions of people driving less in the recession, refiners have been turning less oil into gas, supporting higher prices. Atop that, motorists now are purchasing the so-called "summer blend" gasoline to combat smog in the nation's big cities. This gasoline typically costs 5-10 cents more per gallon.
Still, gas is $1.69/gallon less expensive than a year ago when fears of an oil shortage sent energy prices soaring to $3.93. Atop that, New York Mercantile Exchange gasoline futures for July deliveries are down this morning to $1.81/gallon.
The government’s Energy Information Administration (EIA) projects that regular gasoline retail prices will average $2.21/gallon in the April through September summer driving season, down about $1.60 from last summer. The annual average regular-grade gasoline retail price in 2009 is expected to be $2.12/gallon.
Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Mass., says the national retail average probably won't go much higher than $2.45. Lynch told the Associated Press last week that,“In the last five years or so, there's a tendency for the price to peak out at or before the start of driving season," which began during the Memorial Day weekend. Sander Cohan, an energy analyst at Energy Security Analysis Inc. in Wakefield, Mass., also predicts gasoline prices at the pump will peak at $2.45 a gallon and then come back down. Mike Fitzpatrick, an analyst at MF Global in New York, is slightly more bullish and thinks retail gasoline will peak by July 4 at $2.60-$2.70..
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