Prices for gasoline have leveled out in recent weeks around $1.95 a gallon, but they may be headed up again before summer vacation season ends.
Oil closed above $47 a barrel Wednesday on the New York Mercantile Exchange, a new record. Oil futures are up 52 percent from a year ago.
Meanwhile, AAA is predicting a record 34 million Americans will travel during the Sept. 4-6 Labor Day weekend.
“We should not be surprised if prices go up before Labor Day,” said Dave Overstreet, an AAA spokesman in Spokane. “We’ve had an anomaly going on here recently where gasoline prices have gone down as oil prices have gone up.”
That anomaly looks about to end. The national average for unleaded gasoline began rising slightly, to $1.87 as of Wednesday, according to AAA’s price survey.
The average price for a gallon of unleaded in the Seattle-Bellevue-Everett area was $1.94. That was down from $2.02 a month ago, but still 19 cents above the price at this time in 2003.
During last year’s Labor Day weekend, gasoline prices hit new records, which were broken around Memorial Day weekend this year.
Since the end of July, world oil prices have risen dramatically on concerns about instability in Iraq and political controversy surrounding the big Russian petroleum company Yukos.
Additionally, the Department of Energy reported Wednesday that U.S. inventories of gasoline and oil have declined.
What motorists pay at the pump usually is significantly affected by the cost of crude oil, the largest single component in the price of gasoline. According to the Western States Petroleum Association, crude oil accounts for about 45 percent of the cost of each gallon of fuel.
Even as world oil supplies have tightened this year, U.S. demand for gasoline has generally risen. That’s meant any changes in the market have had an amplified effect.
“There’s a very narrow balance between supply and demand in this country,” said Joe Sparano, president of the Western States Petroleum Association.
He said the nation’s refineries have the capacity to process about 17 million barrels a day of oil, while the nation’s demand has grown to about 20 million barrels a day.
Traditionally, fuel prices begin falling after Labor Day. The Department of Energy forecasts, however, that prices may not fall below $1.80 a gallon before the year’s end.
Reporter Eric Fetters: 425-339-3453 or fetters@heraldnet.com.
Talk to us
> Give us your news tips.
> Send us a letter to the editor.
> More Herald contact information.
