AAA: Gas Prices Inch Closer to $3 Per Gallon

Gas prices have resumed their climb after a brief retreat last week, moving ever-closer to the $3.00-gallon mark. The national average price for regular grade gasoline rose to $2.86 Friday, a 5-cent increase from a week ago and an 18-month high. Last year, gas prices peaked in mid-June, which is still two months away. Current prices are 81 cents higher than a year ago, but still $1.25 less than the record high set in July 2008.
Crude oil ended the week with a three-day streak of losses to close at $84.92 a barrel Friday. Despite losses late in the week, crude oil prices traded just above $87 a barrel Monday and Tuesday, the highest crude oil price in 18 months. Prior to the mid-week downturn, prices had climbed almost 9% in the previous six sessions. The downturn in oil prices was a result of a rise in U.S. jobless claims and high crude inventories outweighing positive retail sales data this week.
In its weekly report, the Energy Information Association (EIA) showed crude stocks rose for the 10th straight week by 2.0 million barrels to 356.2 million barrels, beyond most analysts’ forecasts for a 2.4 million barrel build and higher than the American Petroleum Institute’s 1.0 million barrel build. Gasoline stocks fell 2.5 million barrels to 224.4 million barrels, more than double the forecasted 800,000 barrel drawdown.
The Weekend
“If motorists blinked they may have missed last week’s brief reprieve at the gas pumps, as prices rebounded 5-cents a gallon nationally this week,” said Tracy Noble, Public Affairs Specialist for AAA Mid-Atlantic. “The further we get into the spring and summer driving season the higher gas prices will tick, as we see increased demand, increased crude oil prices and more expensive summer blends at the pumps. In all likelihood, motorists can expect to see gas prices top the $3.00 a gallon mark in the weeks ahead.”
The Week Ahead
The Energy Information Association (EIA) is forecasting retail gas prices will average $2.92 a gallon during this summer’s driving season (April 1 through September 30), up from $2.44 a gallon last summer. The agency also forecasts the 2010 annual average gas price will be $2.84 a gallon, up from $2.35 a gallon in 2009, and crude oil will average $81 a barrel this summer and slightly less than $81 for 2010 as a whole. In terms of demand, the EIA projects gasoline demand will grow by 0.5% this year versus 2009.

CURRENT AND PAST GAS PRICE AVERAGES

Regular Unleaded Gasoline (*indicates record high)