US drivers to see lowest gasoline prices since 2009 this holiday
weekend: EIA
Houston (Platts)--22May2015/1253 pm EDT/1653 GMT
US drivers hitting the roads this Memorial Day weekend can expect to
find the lowest prices at the pump since 2009, federal data showed
Friday.
"On May 18, the US average retail price for gasoline was $2.74/gal, or
92 cents per gallon lower than at the same time last year," the US
Energy Information Administration said in a report published Friday.
"This is the lowest average price heading into the Memorial Day weekend
-- the traditional start of the summer driving season -- since 2009,"
the report said.
After a lag, pump prices began following global oil prices down last
summer, reflecting a glut of oil followed by gasoline pressing on the
market.
Wholesale gasoline values hit bottom in December and began to rebound
early this year, and this trend has also been seen in pump prices.
This spring, gasoline values have been on the rise, reflecting recovered
demand and the seasonal shift to more expensive summer-grade gasoline.
UPWARD TRAJECTORY
Two questions loomed large for gasoline market watchers heading into the
Memorial Day weekend: Will expectations of higher demand materialize
this summer, and will rising pump prices in turn curb demand?
AAA Travel projected Memorial Day weekend will have the highest travel
volume for the holiday in 10 years, with 33 million drivers expected to
get behind the wheel to reach their destinations.
Throughout this spring, US Gulf Coast gasoline market participants have
also reported seeing higher demand in their retail systems.
Some market watchers, however, are concerned that stronger US demand may
not materialize this summer.
"I find recent increasing demand figures ... baffling," Energy Analytics
analyst Thomas Finlon said Monday. "I do think they'll break down after
Memorial Day weekend."
Others, however, argued that gasoline demand is inelastic and prices
have yet to hit a level that would discourage demand.
AAA said the cheapest pump price in the country on Friday could be
found in South Carolina at an average of $2.426/gal, with California at
a US-high $3.780/gal.
--Amanda Rayborn,
amanda.rayborn@platts.com
--Jeffrey Bair,
jeffrey.bair@platts.com
--Edited by Annie Siebert,
ann.siebert@platts.com
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