|By summer, the nationwide average for gas could be below last summer’s peak of around $2.70 a gallon. (Amy Sancetta/Associated Press)|
Gas prices are poised to fall as Memorial Day approaches, a welcome change for motorists who have gotten used to seeing increases cut into their summer vacation money.
Analysts who had been predicting a US average of more than $3 per gallon by Memorial Day now say prices have probably peaked just beneath that threshold. Rising supplies and concerns about the global economy have helped send wholesale gas prices plummeting by 22 cents a gallon since last week.
The decline in prices is starting to filter down to motorists, but it will take several weeks for the full effects to be reflected in pump prices, which average $2.90 nationwide.
By summer, the nationwide average could be below last summer’s peak of around $2.70 a gallon, says Tom Kloza of Oil Price Information Service. In July 2008, the retail price of regular gasoline peaked at $4.11.
From their peaks on May 3, oil prices have declined by 13 percent to $75.65 a barrel. Wholesale gasoline prices have declined by 9 percent to $2.21 a gallon.
Analysts were forecasting a nationwide retail average well above $3 a gallon just a few months ago. So what changed?
■ The European debt crisis escalated.
■ Supplies of gas have risen.
■ Political unrest in oil-producing nations has been muted.
The massive oil spill in the Gulf of Mexico has had no impact on fuel prices because it has had only minimal impact on petroleum production, analysts say.
Predictions of $3-a-gallon gas have come true in 10 states, including California, Hawaii, Illinois, New York, and Nevada. Distance from the US’s refining hub along the Gulf Coast or high taxes are contributing factors.