Photo by Johnny Jackson
The per-gallon price of regular unleaded gas at this Quick Trip station and convenience store rose on May 11, just shy of $4, but in step with prices across Georgia.
By Johnny Jackson
Consumers can expect continued dips and rises, aboard the roller coaster of gas prices, according to energy officials and analysts.
The U.S. Energy Information Administration (EIA) reports that, during the first week of May, crude oil prices fell by nearly $17 per barrel to $97, but rebounded by almost $6 per barrel days later.
Crude oil prices have gone down since, trading below $100 a barrel on the New York Mercantile Exchange for much of the month, according to AAA Auto Club South Spokeswoman Jessica Brady. She said that has played a role in slowing the rise in gas prices.
AAA's Daily Fuel Gauge Report revealed that average gas prices in metro Atlanta were 4 cents higher Tuesday than the national average of $3.94, and 7 cents higher than the state average.
The report indicated the metro Atlanta average was $3.98 per gallon for regular unleaded gas on Tuesday, down a penny from Monday, but about 8 cents higher than the previous Tuesday, May 10. The price remains well above the $2.80 per gallon consumers paid a year ago.
"I expect the price of gas to drop between 10 and 25 cents by Memorial Day," said Patrick DeHaan, senior petroleum analyst for the Brooklyn Park, Minnesota-based company that operates the web site, Gasbuddy.com.
DeHaan said a growing number of consumers are viewing and posting local gas price updates in live time at the web site, which offers a smart phone application for tracking gas prices.
"The longer fuel prices remain near record levels, the more people will cut back," he said. "There certainly is lower fuel demand than it was six months ago."
Factors that contributed to increasing fuel costs earlier this spring are "much less of a concern now," said DeHaan, noting the rise in inventory and good news elsewhere have tempered confidence among market investors and speculators.
The petroleum analyst pointed out that, while consumers have cut back, demand for fuel has remained steady. He said consumers buying gas on the back end of a recession are less hesitant to buy it, than they are on the front end of an economic downturn.
"But we're also finding that high gas prices are making less of an impact than they did in 2008," said DeHaan. "Sentiment has improved, and income has risen."
AAA's Jessica Brady noted the crude oil market recently has been driven, in large part, by speculators' response to various domestic and world events. Crude oil prices, for example, rose earlier this spring in reaction to upheaval in the Middle East. "The European Union (EU) reported their gross domestic product jumped from 0.3 percent to 0.8 percent, more than expected," Brady said. "The upward movement pushed oil prices higher on speculation Europe's fuel demand will increase.
"Oil also increased on concern the flooding of the Mississippi River would damage oil wells and refineries in Louisiana," she continued. "As expected, the Morganza spillway was opened to divert the flood water from New Orleans and Baton Rouge as well as oil refineries."
EIA expects oil markets to tighten through 2012, given projected growth in world oil demand, and slower growth in the supply from countries that are not members of the Organization of the Petroleum Exporting Countries (OPEC).
EIA's Short-Term Energy Outlook (published in May) projects that crude oil prices will average $103 per barrel in 2011, and $107 per barrel in 2012, reductions of about $4 and $6 per barrel, respectively, from the previous month's Outlook.