Fill 'Er Up: Prices at the Pump Are Good
AMERICANS planning vacations by car this summer will find modest prices at the gasoline pump.
While the summer driving season - the peak period for gasoline demand - usually results in higher prices, this year's increases will be minimal, if there are any at all.
Prices are starting the season at the lowest rate in three years. "I think prices are going to be very stable," says Michael Doyle of Computer Petroleum Corp., a St. Paul, Minn., firm that tracks gas prices.
The average price of all grades of gasoline is $1.12 per gallon - down from $1.29 last May and $1.24 the year before, according to the latest Lundberg Survey. Citing stable oil prices, ample gasoline stocks at the refinery level, and less-than-robust demand, analysts say they expect few fluctuations this summer.
"I don't expect to see a trend up or down in the immediate future," says Trilby Lundberg, president of the Los Angeles-based survey. "Bargain prices, higher quality gasoline, and greater competition for consumer loyalty" is what we're seeing, he says.
If there is an increase, analysts say it will be less than a nickel a gallon. A big jump in automobile travel and other types of consumption could push the prices up higher. But few observers expect that to happen when the country is still trying to shrug off recession. And even if demand were to suddenly jump, Europe has ample gasoline stocks to ship over.
The other perennial unknown, of course, is the Organization of Petroleum Exporting Countries (OPEC). Yet nothing there suggests a sudden drop in oil production by members that could lead to a price rise at the pump.
"Barring anything unusual in the Middle East, there is no reason to expect an uptick in gasoline prices this year," says Bob McNally, an oil analyst at Energy Security Analysis in Washington.