With most family vacations wrapping up and teen drivers going back to class, gasoline demand will wane and prices should fall after Labor Day. One expert says prices could drop as much as 15 cents a gallon.
The average retail price for a gallon of unleaded regular gasoline was $2.724 a gallon Friday, according to AAA, Wright Express and Oil Price Information Service. It has dropped about 4.6 cents in the past week but is still 10 cents more than it was a year ago.
Over the next month, motorists could see prices fall 10 cents to 15 cents a gallon unless there's a sudden increase in oil prices and in investors' confidence in the global economy, predicted Tom Kloza, chief oil analyst at Oil Price Information Service. Oil prices have dropped about $7 per barrel over the past two weeks as economic data signal a slowing economic recovery.
"The question is whether (the price drop is) just sort of the hangover from the summer or whether it's the start of something that resembles a trend," Kloza said.
Prices already are falling in parts of the country. Kloza said he has seen prices between $2.25 a gallon and $2.50 a gallon in some areas of southern Missouri, Arkansas and South Carolina.
Motorists on the West Coast are paying the highest amount, with drivers forking over $3.153 a gallon in California, $3.022 in Oregon and $3.144 in Washington. Even so, Kloza suspects motorists could find gas below $3 a gallon in some areas.
Gasoline prices have remained steady for much of the summer even though demand picked up as more families hit the road for vacations after staying close to home last year.
In the past four weeks, gasoline demand rose 3.5 percent compared with the same period in 2009. At the same time, crude and wholesale gasoline prices have dropped.
Oil supplies are bulging, demand for overall energy products remains weak and consumers are conserving their cash as they worry about the slowing economy.
Oil prices fell a third consecutive day amid concerns about lagging economic growth. Benchmark crude for October delivery lost 97 cents to settle at $73.82 a barrel on the New York Mercantile Exchange. Slower economic growth is an indication that factories will need less energy and that companies will be reluctant to hire.
The retreat mirrored a pattern in the stock markets. The Dow Jones industrial average fell about 57.59 points, a day after falling 144 points. Broader indexes also fell moderately.
Energy stocks were among the worst performers on the day. The AMEX Oil & Gas index, which includes oil companies ConocoPhillips and Chevron as components, fell more than 1 percent Friday and 3 percent for the week.
In other Nymex trading in September contracts, natural gas for September delivery settled 5.4 cents lower at $4.117 per 1,000 cubic feet; heating oil declined 2.97 cents to $1.9710 a gallon and gasoline lost 0.36 cent to $1.9251 a gallon.
Brent crude settled down $1.04 at $74.26 a barrel on the ICE futures exchange.
Associated Press writers Pan Pylas in London and Eileen Ng in Kuala Lumpur, Malaysia, contributed to this report.
Click here for gasoline prices in Northeast Mississippi at the Biz Buzz blog.