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Experts Reverse Course on Gas Prices: Predict Decline

Increased supplies, recession fears may ease prices

By Joe Benton
ConsumerAffairs.com

February 9, 2008

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In the up and down world of U.S. gasoline prices, the experts are now suggesting the cost of a gallon of regular could drop in the weeks ahead. Increased U.S. gasoline supplies mean gasoline prices could tumble as much as 50 cents by spring, according to AAA.

“High fuel prices, coupled with the threat of a recession, are forcing drivers and consumers to conserve, which is likely to raise domestic supplies and cause prices to withdraw,” the auto club said.

U.S. gasoline supplies reached 227.5 million barrels last week, the highest level in almost 14 years, according to the U.S. Energy Information Administration.

Just last week energy experts predicted gasoline prices might rise 50 cents a gallon by the summer driving season because of increased demand.

Now they say existing gas prices along with the slowing economy are causing consumers to reduce driving, leading to speculation that pump price increases this spring and summer might not be so bad.

Regular gasoline sells for an average price this week of $2.97 across the country. One month ago a gallon of regular sold for $3.10 and one year ago a gallon cost $2.20. Mid-grade now sells for $3.15 and premium sells for $3.26 a gallon.

The most expensive gallon of regular gasoline in the country is found in Armonk, New York for $3.87. the cheapest gallon is on sale in Hayti, Missouri for $2.62.

Here is a look at some gasoline prices from around the country in the ConsumerAffairs.com Gas Price Round Up.

Texas: Gasoline prices fell for the fourth week in a row across the state.

The average price of regular self-serve at pumps in 11 Texas cities is $2.87 per gallon, almost a penny less than last week, according to the weekly AAA Texas gas price survey.

"Gasoline supplies hit a near 14-year high of 227.5 million barrels last week, according to the U.S. Energy Department," said AAA Texas spokeswoman Rose Rougeau. "The increase in gas inventories is being fueled by falling demand, which implies consumers are driving less due to the weakening economy."

Corpus Christi had the lowest average price of regular self-serve at $2.82 per gallon, 5 cents less than last week. Austin-San Marcos had the state's most expensive gasoline at $2.90 per gallon, still 2 cents less than last week.

California: The decline is California gas prices stalled last week and some areas are seeing increases.

The average price in the state for regular self serve is $3.13 a gallon, according to AAA.

"Prices aren't rising quickly right now and are just hovering at about the same level as they were last week," said Jeffrey Spring, a spokesman for the auto club.

"It's hard to say whether this is the end of price decreases or a brief break before they start going down again. Some recent reports have indicated that prices could head down this spring. Others have pointed higher. We'll have to wait and see," Spring said.

The average price of self-serve regular gasoline in the Los Angeles-Long Beach area is $3.08, which is just four-tenths of a cent lower than last week. In San Diego, the price is $3.11, which is half a cent more than last week's price.

The highest average price in California once again this week is in San Francisco at $3.32 for a gallon of regular.

The lowest price found in California is in Vallejo at $2.79 a gallon.

Florida: The price of a regular gallon of unleaded gasoline in Florida is now $3.03. Last week the price was about $3.06.

A year ago, the average price of a gallon of regular unleaded gasoline was $2.19 in Florida.

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