Gas Now 24 Cents Cheaper Than On Memorial Day, Indicating Early Peak

(AP) NEW YORK — Call it an Independence Day discount.

Gasoline prices usually peak in the summer. This year, however, they peaked a little earlier, on May 5. The subsequent slide has made gas about 24 cents per gallon cheaper than it was on Memorial Day.

The national average now stands at $3.55 per gallon. That's the cheapest gasoline has been since late March. Tom Kloza, publisher and chief oil analyst at Oil Price Information Service, expects the national average to drop another 25 to 30 cents per gallon this year.

"Prices will be lower until we get to hurricane season, then who knows?" Kloza said.

Hurricanes that pass through the Gulf of Mexico can potentially disrupt oil production and force fuel prices higher.

While gas is cheaper than it was on Memorial Day, it's hardly inexpensive. It's still 79 cents more than a year ago. And the only other year gas prices were higher for the July Fourth holiday was 2008, when gas was around $4.10 per gallon.

The drop in gas is due to a decline in oil prices. Benchmark West Texas Intermediate has given up more than 16 percent since the beginning of May. The contract for August delivery lost 48 cents to settle at $94.94 per barrel Friday on the New York Mercantile Exchange.

In London, Brent crude fell 71 cents to settle at $111.77 per barrel on the ICE Futures Exchange.

Oil fell Friday after China reported that its manufacturing industry cooled off in June, slipping to its slowest pace in 28 months. Activity slowed down as credit tightened due to inflation-fighting measures and weaker oversea demand. The country is still expected to drive world oil demand for years, but a slowdown in manufacturing could temper the demand for fuels.

In the U.S., however, factory activity picked up in June, in part because of lower fuel prices. The Institute for Supply Management, a trade group of purchasing executives, said Friday that its index of manufacturing activity has increased for 23 straight months.

In other Nymex trading for August contracts, heating oil dropped 2.18 cents to settle at $2.9245 per gallon and gasoline futures added less than a penny to settle at $2.9726 per gallon. Natural gas fell 6.3 cents to settle at $4.33 per 1,000 cubic feet.

Comments

[kenhamlett]

03:34 PM on 07/05/2011

Over the past week, the price/barrel of oil has gone from just over $89 to $97. I have watched for some note of the increase on the HuffPost, and this story is the closest thing to a mention so far. But, it does not take note of the $2/barrel increase just today. The meaning of this, of course, is that today's $3.55/gallon average is about to head upward again. As a Democrat, I am concerned that this means a further slowdown in our recovery or even the double dip we have been assured would not happen. It is mystifying to me that others seem unconcerned about this and are doing nothing to reverse the trend. Two weeks ago, the President made a release from the strategic oil reserves, and we were told that would drop the price of gasoline by at least 50 cents/gallon for the remainder of the summer. It did not turn out that way, but no one is taking note. Ignoring problems will not make them go away, as we have learned too often in recent years.

[Vyvjala]

01:45 PM on 07/05/2011

The speculator serpents and hedge fund weasels are on the march, the price of crude is going up.

[blackhole2008]

10:27 PM on 07/04/2011

Nothing "cheap" about 3 plus bucks per gallon.

[SILVANUS]

03:42 PM on 07/04/2011

Got em trained well, huh:? "Oh Jim! It's ONLY 3.67 down the street! Run!"
Of course, she does not remember it was a dollar cheaper 8 months ago.
Bah, bah....

[muck-raker]

12:28 PM on 07/04/2011

..................NFL......................(not for long)........the word was probably passed down to the Gold-in-Sacks hedge funds to lay off to give the millions of Americans a little breathing room...Soon they will return to their sweat boxes to earn their master much profits while they take home a pittance which just barely keeps the WOLF AWAY FROM THE DOOR.

[BocaMom]

10:57 AM on 07/04/2011

Gasoline is still TWICE as MUCH as it was 2 years ago! Thanks for NOTHING, President Obama.
Our home values are in the toilet, gas prices are rising, we're losing our life savings and President Obama is going on ANOTHER vacation to Martha's Vineyard (playground of the Kennedy and the rich). It's disgusting!

[Hollywooddeed]

12:01 PM on 07/04/2011

Yes, President Obama personally sets gas prices.

When the economy crashed in 2008 before the election, did you think it would be an easy fix? Were you extra upset when Bush Junior spent nearly half his 8 years on vacation or is that an Obama thing?

[blackhole2008]

10:28 PM on 07/04/2011

Sounds like you are in favor of regulating businesses.

[jcolvin325]

04:54 PM on 07/03/2011

*If

[Janine547]

02:42 PM on 07/03/2011

Put $800 worth in the boat this morning.

[democrats for life]

09:03 PM on 07/03/2011

that should be enough to boat yourself out of the country, and don't come back

[Janine547]

10:12 PM on 07/03/2011

Nah, just enough to get me to the Atlantic, where I could stop and vote for one of Christie's proposals I support.

[SILVANUS]

03:43 PM on 07/04/2011

Keep going...

[Kenz300]

12:34 PM on 07/03/2011

The long term trend for oil prices is up. We all will begin to use energy wisely as prices continue to go up. Some will drive less, others will car pool, use public transportation or bring out the bicycle. We will begin the transition to more fuel efficient vehicles. 40 MPG is better than 20 MPG. Electric, flex-fuel and hybrid vehicles will become more common. Second generation biofuels made from algae, cellulose and waste will become a bigger part of our fuel supply. High energy prices will change how we value and use energy.

[notdarkyet]

11:43 AM on 07/03/2011

They are just trying to find a happy medium where they can still make record profits without killing the rest of the economy and making people so mad they won't drive at all.

[fortressfountain]

11:19 AM on 07/03/2011

Humm, there is no shortage of gas. I do not see fuel lines or early closings.
However when people try to purchase gold it is hard to find it available on the local level.

[klinzboy]

11:00 AM on 07/03/2011

Yep, normally folks will move around on the fourth no matter what hence the annual increase. Profiteering at it's best. Ooops increased demand means increase in prices. Or was that lower supply means increased price? This year people were planning to stay home this 4th. No travel means no profit. Gotta bring those prices down this year to get folks back on the roads and buying fuel! I gotta tell you, I feel just great about $3.50/gas. Even so we still pay less than most of the rest of the world. The real problem here is that we need to be less dependance on this stuff.

[rnorthro14]

10:07 AM on 07/03/2011

If we want to affect real positive change, we need gas at $7 a gallon. This way people would start making the necessary adjustments in the lives before its too late.

[TresJolie7]

04:36 PM on 07/03/2011

Amen! Americans are not entitled to cheap gas forever.

[SILVANUS]

03:44 PM on 07/04/2011

Got a lot of stock in gas and oil, huh?

[rnorthro14]

04:22 PM on 07/04/2011

I wish. I had to ultimately cash in all my stocks due to long term unemployment. Just thinking about the impending scarcity and the environment.

[frank day]

08:45 AM on 07/03/2011

There is a glut of oil right now.

The high price isn't demand driven or a shortage of supply.

It is still overpriced.

$3.37 a gallon this morning at the local station.

[CPA 4 Life]

01:30 PM on 07/03/2011

'There is a glut of oil right now.'

Evidence? Link?

[Breth]

01:20 AM on 07/04/2011

http://www.bloomberg.com/news/2011-06-17/u-s-oil-supply-jumps-to-highest-may-level-since-1980-api-says.html

[CPA 4 Life]

02:00 PM on 07/03/2011

"refiners in the world’s biggest economy have more crude on hand and are importing less as demand for fuels such as gasoline and diesel is slipping"

Yes, when you ignore Brazil, India, and China oil prices look overpriced.

[frank day]

02:05 PM on 07/03/2011

My post got deleted??? Weird.

Anyway, obviously the idea of a current oversupply doesn't fit

into some paradigm you have.

Happy 4th !

[Morgantheaxe]

01:31 AM on 07/03/2011

Im truly hoping speculators learned their lesson. The abrupt release to catch them off gaurd and cause them to lose money was meant as a message. I really wonder if they got it? Stop jerking around with gas prices!!!