AAA anticipating decline in gas prices in short-term

By Johnny Jackson


AAA Auto Club South Spokeswoman Jessica Brady said that, while consumers experienced slight increases in the average price of a gallon of gasoline this past week (about two cents in Georgia), consumers can expect to see prices decline in the coming days in response to declining investor confidence and demand for gas.

The average price for a gallon of regular unleaded gas in Georgia remained unchanged Thursday, compared to Wednesday's $2.65 per gallon, according to AAA's Daily Fuel Gauge Report. The report also revealed that metro Atlantans paid $2.65 per gallon, or a penny less on Thursday, than they did on Wednesday.

Brady said other factors contributing to that decline include the gain in strength of the U.S. Dollar against the Euro. "Supplies also have increased in crude oil and fuel," she continued. "U.S. refineries have been operating at about a 90 percent capacity, but they are now operating at 88 percent capacity. So, we could ramp up another 12 percent and be fine in terms of supply."

Brady explained that the ample supply has contributed to lower crude oil prices, which have been hovering steadily between the $76 and $77 per barrel mark. She said chances of even lower prices at the pump will depend partly on whether crude oil prices on the NYMEX close at that $76-$77 mark today.

Brady said average gas prices are not likely to exceed the $3 per gallon mark this year. However, many factors can contribute to increases between now and the Labor Day holiday weekend, when gas prices normally begin to decline.

"It typically marks the end of summer time," she said. "Investors rallied last week to give the price of crude oil an upward push as the summer months near an end, and before the U.S. switches to a less expensive blend of fuel."

The U.S. Energy Information Administration projected in its updated Short-Term Energy Outlook, published on Aug. 10, that the national average price per gallon over the second half of 2010 will be $2.77 per gallon -- up one cent per gallon from the average for the first half of the year.