This Memorial Day weekend, prices at the gas pump are going down
The average US price of regular gasoline is now $2.75 a gallon, down from $2.87 a month ago. The last time prices at the gas pump fell leading up to Memorial Day was in 2005.
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“A lot of the drop is due to the uncertainty around the European debt situation, with the prospects of diminished economic growth in Europe and even the US,” Mr. Gamson says. Reduced economic growth usually means less demand for energy and cheaper oil prices.Skip to next paragraph
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At the same time, crude supplies have been plentiful. “There is a big surplus of oil at Cushing,” says Gamson, referring to the Oklahoma storage hub that holds anywhere from 5 percent to 10 percent of US inventory.
Some of that oil is being used to meet rising gasoline demand as the economy has picked up. “Demand is definitely on the upswing, but not overwhelmingly strong,” says Sander Cohan, a gasoline analyst at Energy Security Analysis Inc. in Wakefield, Mass.
Refiners, he says, have increased their output to meet the higher demand. “But there is still capacity available. There is some wiggle room,” he explains.
In past years, the price of gasoline has risen before Memorial Day because refiners have had to produce “summer blends” that burn cleaner. At times the cost of those blends has soared, adding to the price at the pump. But this year, the amount of blended gasoline in storage is larger than the amount of unblended gasoline, says Mr. Cohan. This is giving refiners the ability to react quickly to increases in demand, he adds.
In past Memorial Days, consumers have sometimes watched as gas stations raised prices for the three-day weekend. But this weekend may be different, Cohan says. “There is a lot more competition to sell that gallon of gasoline,” he says.
For many Memorial Day destinations, that’s good news. For example, 30 million people are within a gas tank of the beaches in the New Jersey community of Avalon, notes Scott Wahl, a spokesman for the community. “With gas prices low, it only helps,” he says. “We’re expecting a lot of day-trippers.”
Proof that the low gasoline prices are helping the town: On Friday morning, he says, the streets and sidewalks already had a busy summer-day feel. “I’ve been here since 1979, and this is the most crowded I’ve seen on an early Friday,” he says.