Gas prices are beginning to drop from their peak set last week.
The national average price dropped half a cent Monday from Sunday's level and now stands at $3.96 for a gallon of regular gasoline, according to the AAA Daily Fuel Gauge Report. That's the fourth drop in a row after the price hit a high of more than $3.98 on May 6. Average prices fell in every state Monday, led by 3 cent drops in Illinois, Indiana, Michigan, and Wisconsin.
It looks like the high for May was set last week, says Brian Milne, US-based refined fuels editor for Telvent, a global IT solutions and business information services provider headquartered in Madrid. "We're going to start watching prices go down."
How far prices will go down is anybody's guess in the wake of last week's sharp sell-off in oil and other commodities. Gas prices typically go down in June, Mr. Milne says.
The sharpest drops can be expected in the midwestern states that saw the sharpest rises. Because of a confluence of events – refinery closings, outages from tornadoes, delayed shipments due to flooding, and the switchover from winter-blend to summer-blend fuel – a handful of states saw average gas prices reach new records last week.
Now, that situation is easing.
Illinois is a case in point: After hitting an all-time high May 5 just under $4.32 a gallon, the price by Sunday had moved down to $4.28 and, by Monday, had dropped another penny to $4.27.
The drop has been even more dramatic in Michigan, which hit its all-time high just under $4.26 on May 4 and has now fallen to a little under $4.14 -- a 12-cent drop. Ohio's average gas price has fallen nearly 14 cents from its all-time peak on May 4; Wisconsin is down 8 cents from its May 5 peak.
"Many of the concerns of limited gasoline supplies have been ... removed," says Avery Ash, AAA's Washington-based manager of regulatory affairs. Refineries are coming back online. The switchover to summer-blend fuels is largely over. "People are feeling a little bit more confident about that now," he adds.