For the second consecutive week motorists saw double-digit price increases at the gas pump.Â The average U.S. retail price for regular grade gasoline reached $2.29 on Friday, up 12 cents from a week ago and the highest weekly increase since Hurricane Ike in September 2008.Â Although gas prices are at a six-month high, they are still 44% below the record price of $4.114 set on July 11, 2008.Â Modestly positive global economic news, coupled with the traditional spring-summer price bump, contributed to the jump in gasoline prices.
Although relatively stable compared to last week, crude oil remained at six-month highs, trading above $60 a barrel mid-week to settle at $56.41 at the close of trading Friday.Â Among many factors holding oil prices in check this week is, according to the Department of Energy (DOE), U.S. crude oil inventories rose to 375 million barrels in May, marking their highest levels since 1990.Â Another contributing factor, consumer demand, is at a 14-year low.Â According to the Energy Information Administration (EIA), U.S. gasoline demand over the past 4 weeks averaged 9.03 million barrels per day, down 1.2% from a year ago.
According to the American Petroleum Institute (API), total U.S. petroleum demand fell 3.6% in April from a year ago and for the January to April period saw the lowest levels since 1998, reflecting continued weakness in the economy.Â U.S. gasoline demand increased slightly for April, primarily due to the fact that year-ago levels were the lowest for any April since 2003.
"Motorists will undoubtedly see gas prices continue their uptick through the Memorial Day weekend," said David Weinstein, Manger of Public and Government Affairs for AAA Mid-Atlantic.Â "However, despite increases at the pump, 32.4 million people (a 1.5% increase over last year's dismal travel season) are expected to take to the highways this Memorial Day weekend for the official start of the summer driving season.Â After months of cabin fever, deep travel discounts and cheaper gas will lure many Americans out and about for the upcoming holiday weekend."
The Week Ahead
Looking ahead to the summer driving season, the Energy Information Administration (EIA) forecasts the price of gasoline will average $2.23 a gallon from April through September, $1.60 below the same period a year ago.Â While a bump up in gas prices is expected this time of year, analysts do not foresee another spike in gas prices as seen last summer with record-setting $4.00-plus prices.Â That said, experts expect prices at the pump will continue to increase through the upcoming Memorial Day weekend.
â€” ANDY LAGOMARSINO, NEWJERSEYNEWSROOM.COM