Summertime gas prices could fuel road trips

By DAVID R. CORDER, DAILY SUN

Friday, April 17, 2009 7:46 AM EDT

THE VILLAGES — Take advantage of it while it lasts.

All indicators suggest gasoline prices have entered a period of stability, with market experts like Tom Mirabito Jr. suggesting that trend could continue at least over the

summer.

“You’re not going to see much movement in prices until the economy rebounds,” said Mirabito, a recently retired convenience store industry executive who now lives in the Village of Springdale with his wife Sharon. “Then, you’re going to see some big upticks.”

Prices are expected to peak at about $2.30 a gallon for unleaded regular later in the summer, the federal Energy Information Administration forecast earlier this week in its “Short-Term Energy and Summer Fuels Outlook” report.

“The increase in consumption provided by the dramatic fall in (recent) petroleum prices from last year is being offset by a weak economy,” the federal agency reported. “These counterbalancing forces are expected to be prominent features of the summer driving season, defined as the period from April 1 to Sept. 30.”

So now might be a good time to plan a vacation, AAA Auto Club South spokesman Gregg Laskoski said.

“We certainly encourage people to do the type of traveling they look forward to either for spring break or a family vacation,” Laskoski said. “We’re very optimistic about gasoline prices this year, because we don’t anticipate they will be a factor in anybody’s decision-making (on) where to go and what to do.”

Some market experts suggested prices might even fall, depending on consumer demand and crude oil inventories.

“I’ll take the ‘under’ on that call, but I wouldn’t be surprised to see as low as $1.75 a gallon or as high as $2.50 a gallon,” said Tom Kloza, chief analyst at the Oil Price Information Service, which surveys retail gasoline prices for AAA’s “Daily Fuel Gauge Report.” “It’ll be very, very difficult to make any serious case for $2.50 a gallon or higher.”

Look at crude oil prices to understand part of the reason for the stable gasoline prices, Laskoski said.

“The crude oil prices we’ve seen the last few weeks have closed right at $52 and some change per barrel,” Laskoski said. “That’s really created the stability the consumers have seen in retail prices over the past few weeks.”

Crude oil prices settled even lower Thursday at $49.98 a barrel at the close of trade on the New York Mercantile Exchange.

“What’s going on now is that oil inventories, or the fundamentals, you might say, continue to deteriorate,” Kloza said. “But prices are steady because the financial community — whether it be banks, hedge funds, commodity funds, investors and others — continue to invest in oil futures, particularly crude.”

Consumers also should take a close look at retail prices for gasoline later this month, Mirabito noted.

Convenience stores must make the seasonal switch to summer-blend gasoline from winter-blend, or face federal environmental penalties, he said.

If unable to unload that inventory, Mirabito said, retail prices could drop substantially.

“There could be spikes,” he added.

David R. Corder is a reporter with the Daily Sun. He can be reached at 753-1119, ext. 9066, or at david.corder@thevillagesmedia.com.