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<< Previous   of   Next >>   ADVERTISEMENT   Avoiding traffic If you're looking to avoid holiday weekend traffic jams, the Washington State Department of Department has a Web site for you: www.wsdot.wa.gov/Congestion/IndependenceDay. The site compares travel times on the busiest freeways and suggests the best times to drive.   CONTACT THE HERALD Robert Frank, City Editor frank@heraldnet.com   Published: Thursday, July 3, 2008 If you think gas costs hurt now, just wait By Eric Fetters Herald Writer Gasoline prices have paused in their stupendous upward climb over the past three months, but the worst may be yet to come. After peaking at the all-time high of $4.389 on June 22, the average price of gasoline around the Puget Sound area has flattened out. As of Wednesday, according to AAA's Fuel Gauge Report, the local average price was $4.377. Diesel had dipped slightly to $4.88 a gallon. That brief, small break in prices may be the only one drivers see this summer. "I wouldn't count on prices going down much," said Dave Overstreet, spokesman at AAA's regional office in Bellevue. Tom Kloza, chief oil analyst with the Oil Price Information Service, said most summers see more price relief between Memorial Day weekend and the Fourth of July. "In most previous years, a slight ebb tide has followed the spring high tides for crude and gasoline and knocked off, say, 10 percent or so of the price. This year, the best that low tide could do was deliver a few flat weeks," Kloza wrote in an e-mail. Which isn't a good sign for the next two months, he added. His prediction? August will see new all-time highs for gasoline, with retail gasoline prices ranging across the nation from $4.25 to $4.75 a gallon "at least." Which could put a big crimp in many people's summer vacation plans. Back in May, AAA forecast a 1 percent drop in travel during Memorial Day weekend, when gasoline still was averaging under $4 a gallon. For the upcoming July 4 weekend, AAA is predicting the number of Americans traveling at least 50 miles from home will be down 1.3 percent from last year. That's the first decline in Fourth of July weekend travel in a decade, according to AAA. At the Floating Feather Inn, a bed and breakfast in Ocean Shores, owner Nancy Milliman said she hasn't had nearly as many guests from Snohomish County as usual. During a slower-than-normal spring, the Floating Feather was offering cash incentives to guests to help offset rising fuel costs. Milliman said reservations have picked up since then, however. "July is incredible. Every­body's ignoring gas prices for now," she said, adding that the cash incentives may return in August and September, however. AAA's Leisure Travel Index, based on available rates this holiday, reports holiday travelers can expect airfares 13 percent higher than last year on average and rental car rates that are 12 percent higher. Add those increases to gasoline prices that are running a whopping 43 percent higher than last year. "Everything taken into consideration, the fact that our projection calls for only a 1.3 percent decrease in travel is pretty amazing," Overstreet said. The question is whether falling demand for gasoline and oil, at least in the U.S., will have any dampening effect on prices. On Monday, the Energy Information Administration reported that U.S. oil demand in April dropped 4 percent from 2007, the lowest level for any April in six years. Additionally, domestic gasoline stocks rose to almost 211 million barrels last week, the federal agency said Wednesday, as demand fell 1.3 percent compared with the year-ago period. The problem, Kloza said, is that the oil markets are in the grip of two powerful forces: money and fear. As long as those factors, not a rational look and supply-and-demand levels, are driving the markets, prices will stay up. That seemed to play out again Wednesday. Investors worried about new Middle Eastern tensions and fretted over a government report that the nation's stocks of crude oil dropped more than expected, despite the fall in demand. Those factors were enough to send oil prices surging in after-hours trading above $144 a barrel, a new record. Kloza said he wouldn't be surprised to see $150 a barrel in August. Reporter Eric Fetters: 425-339-3453 or fetters@heraldnet.com. READER COMMENTS Be the first to comment. You must be a registered user and verify your e-mail address to post comments to blogs or articles on HeraldNet. To register, click here. To read other terms and conditions, click here. Log out

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