Unofficial start of summer driving season approaches.
Gas prices continued to retreat for the sixth straight week, pulling back from an early-April peak of $3.94 nationally, just in time for the upcoming Memorial Day holiday weekend. The national average price of regular grade gasoline fell to $3.71 a gallon on Friday, down 2 cents from last week, 19 cents lower than month-ago prices and 22 cents lower than year-ago prices. Prices at the pump remain 40 cents below the all-time record of $4.11 set in summer 2008.
Crude oil closed lower for 10 of the last 11 trading sessions through Wednesday, to settle at $92.81 per barrel, the commodity’s lowest settlement in more than six months (November 2, 2011). A strengthened U.S. dollar has been a factor in keeping pressure on oil. However, Thursday saw a reversal in the downward trend as traders reacted to remarks by the U.S. ambassador to Israel that U.S. plans for a possible military strike on Iran were ready and "fully available." The remarks came just days before Tehran is set to resume talks with world leaders under the suspicion the country is seeking to develop nuclear arms. Friday crude oil declined Friday, due to worsening financial problems in Greece and Spain, to settle at $91.48. Over the last three weeks, crude oil has slumped $13.45 (almost 13 percent), the biggest three-week loss since the week of August 14, 2011.
In its weekly report, the Energy Information Administration (EIA) reported the nation’s crude oil stocks rose for the eighth consecutive week by 2.1 million barrels to 381.6, in line with expectations. Gasoline stocks fell 2.8- million barrels to 204.3-million bbl. Weekly gasoline demand was as robust as it has been for gasoline this year, at 8.971-million barrels per day (bpd), up 107,000 b/d from last week and off by just 0.85 percent from last year, pointing to the real possibility of at least a few weeks of demand over 9-million bpd.
"Motorists continue to enjoy victory, albeit slow in coming, at the pump as gas prices continue to retreat just in time for the long-anticipated Memorial Day holiday weekend," said Ragina C. Averella, Manager of Public and Government Affairs for AAA Mid-Atlantic. "Have we seen the gas price peak for summer 2012? Analysts say we very well may have, which is welcome news for motorists. Yet of the projected 34.8 million Americans set to travel next weekend, almost half (47 percent) say they will compensate for higher fuel costs by cutting other areas of their travel budgets in order to usher in the unofficial start of summer with a holiday weekend getaway."
AAA projects 34.8 million Americans will travel 50 miles or more from home during the Memorial Day holiday weekend, an increase of 1.2 percent – or 500,000 travelers – from the 34.3 million people who traveled one year ago. Approximately 30.7 million people nationwide plan to drive to their destination, an increase of 1.2 percent from the 30.3 million who drove last year. Almost nine out of ten holiday travelers (88 percent) will take to the nation’s roadways during the Memorial Day weekend keeping automobile travel in the traditional lead as the dominate mode of holiday travel transportation. A survey of intended travelers across the country found that 53 percent said recent increases in gasoline prices would not impact their Memorial Day holiday travel plans. Of the remaining 47 percent of travelers who said gas prices would impact their travel plans, many said they will economize in other areas – shorten trip distances, stay at less expensive hotels or stay with family/friends, or reduce spending on entertainment – rather than cancel travel plans.