Gasoline prices are cooling off
Regular costs $1.51 less than a year ago
Tom Stundza -- Purchasing, 7/7/2009 12:13:14 PM
The national gasoline price average has slipped to $2.60/gallon for regular unleaded this week, which is $1.51 off the price this time last year, according to surveys but he AAA motor club and the Energy Information Administration. The New York Mercantile Exchange futures price for New York harbor imports of unleaded gasoline has dropped this week as well to $1.71 for September deliveries and $1.62 for October and November deliveries.
After rising with crude oil prices in recent months, pump prices have halted their march to $3/gallon and may not go any higher this summer, analysts said.
"The demand for gasoline just hasn't been there," Dan Ronan, spokesman for AAA-Texas motor club tells The Houston Chronicle, citing the weak economy. Historically, gasoline prices hit their summer peak around the busy July Fourth weekend, and there is no reason to believe this year will be any different, he says.
If that's the case, prices will hover at levels far below last summer, when crude oil's rise to near $150/barrel sent the price of regular gasoline to a record U.S. average of $4.11 on July 17. "Despite understandable concern over the increase in U.S. gasoline prices to date in 2009, it appears that the summer market may be near, if not past, its peak," says the EIA's latest market analysis.
In a market overview, the Houston newspaper explains that gasoline prices typically rise in the summer as refiners switch to making more expensive summer fuel blends and demand rises as Americans take to the roads for summer vacations.
But demand has been weaker than normal this year because of reduced driving. "Most of the increase at the pump is linked to the surge in the price of crude oil, which accounts for more than half the price of gasoline, and not from the usual bump in driving," suggests the EIA.
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