Gas prices are expected to peak this Memorial Day weekend, but that is not necessarily all bad news. While prices may creep up over the weekend, it is expected to drop back again over the summer. Even at its peak, which is expected to be a national average of about $2.75 a gallon, it will still be the cheapest gas prices for Memorial Day drivers in the last five years.
Barring a major refining incident, hurricane or other disrupting factor, unleaded gasoline prices are expected to peak at about $2.75 per gallon for 2015 in the next several days. The AAA motor club expects the highest level of Memorial Day weekend travel in 10 years and forecasts that 37.2 million Americans will travel 50 miles away from home this holiday weekend. That is a 4.7 percent increase over last year when gasoline prices were about 90 cents higher per gallon.
Gas was averaging $2.73 a gallon nationally on Friday, which is 4 cents higher than last week and 26 cents more than a month ago, according to AAA. Tom Kloza, head global analyst at Oil Price Information Service, said he expects summer prices to hover around $2.50 nationally before dropping closer to $2-$2.25 in the fall.
“This weekend will be peak, and we’ll see slight declines as we go through the summer,” said Andrew Lipow, president of Lipow Oil Associates. “There’s still a lot of crude oil out there that’s going to temper any rises at all. But having said that, the demand for gasoline this summer is going to be very good, due to the lower prices.”
The gasoline peak is expected to be about a dollar a gallon less nationally this year than last year, when the high was $3.71. Kloza said he thinks the futures market signaled the peak on May 6, when gasoline futures hit a high of $2.09 per gallon.
Memorial Day is viewed as the start of the summer driving season, and according to Kloza, drivers should spend about $10 billion less a month over last year’s levels for June, July and August.