The official start of the summer driving season is nearly upon us and for the second consecutive week prices at the pump continue to back away from the spring peak price of $2.93 a gallon set on May 6. This is welcome news for motorists planning to take to the roads next week for the Memorial Day weekend. In the past week, gas prices have fallen 5 cents to $2.83 a gallon on Friday. Current prices are 47 cents higher than a year ago, but still $1.28 less than the record high set in July 2008. Will prices plunge lower? The price of gasoline follows fast on the heels of the crude prices. A ten dollar drop in the price of a barrel of crude, translates into a 24 cent drop in a gallon of gas.
Crude oil continued its downslide for a second week, as prices hovered on both sides of the $70 a barrel mark. The commodity briefly touched a 9-month low of $64.24 the largest trading day price range of around $7 since October 2008, before settling at $70.04 Friday. Prices have fallen almost 20% from the 2010 high of $87. Concerns that Europe’s debt crisis could hurt global economic recovery and slow energy demand continue to be a major factor in the movement of oil prices. In addition to European economic worries, an unexpected increase in U.S. jobless claims also played into crude oil’s retreat.
The Energy Information Association’s (EIA) weekly report showed crude stocks grew by 200,000 barrels to 362.7 million barrels, the eighth consecutive week crude inventories have been above 350 million barrels. Gasoline stocks dropped 300,000 barrels to 221.8 million barrels.
The Weekend
“Retreat. It’s often a word associated with defeat. But it’s victory for consumers as gas prices continue to draw back from the projected $3.00 a gallon seasonal peak. Motorists will take advantage of this as they take to the road for the upcoming Memorial Day holiday weekend,” said Tracy E. Noble, Manager of Public and Government Affairs for AAA Mid-Atlantic. “The recent decline in gas prices will be good news for the anticipated 28 million Americans who plan to travel by car for the upcoming holiday weekend. Overall, AAA projects the number of Americans traveling for the Memorial Day holiday weekend will be up 5.4% from 2009, with approximately 32.1 million travelers taking a trip away from home.”
The Week Ahead
AAA is projecting the number of Americans traveling on vacation for the upcoming Memorial Day weekend will increase 5.4% from 2009 with approximately 32.1 million travelers taking a trip away from home. Last year 30.5 million Americans traveled during the same period. Automobile travel is expected to increase in popularity with 87% or 28 million people traveling by car. This Memorial Day weekend AAA does not expect the price of gas to average more that $3.00 a gallon.
CURRENT AND PAST GAS PRICE AVERAGES
Regular Unleaded Gasoline (*indicates record high)
5/22/10 | Week Ago | Year Ago | |
National | $2.81 | $2.88 | $2.24 |
New Jersey | $2.73 | $2.78 | $2.25 |
Trenton | $2.77 | $2.82 | $2.29 |
Cape May County | $2.71 | $2.77 | $2.22 |
Burlington County | $2.68 | $2.76 | $2.25 |
Middlesex, Somerset, Hunterdon | $2.75 | $2.80 | $2.26 |
Monmouth, Ocean Counties | $2.72 | $2.77 | $2.25 |
Crude Oil | $70.04 per barrel (close on Friday) | $71.61 per barrel | $50 per barrel |
