Gas Prices Continue To Slowly Fall

There is good news for motorists planning to hit the road this Memorial Day Weekend. The price of gas is going to be less than it appeared it would be at the beginning of the month.

On May 5, the average price of self-serve regular, as tracked by the AAA Fuel Gauge Survey, peaked at $3.985 a gallon – just a penny and a half shy of the important psychological price point of $4 a gallon. The smart money was betting the price would hit $4 the next day.

But it didn't. A few days earlier something spooked oil traders, who began selling their positions in the futures market. As oil futures dropped, so did gasoline futures – as much as 26 cents a gallon in a single day.

Lower pump prices took longer

However, it took a bit longer for the new price trend to show up at the gas pump. Gas stations were still working on supplies they had paid higher prices for. But the prices did start to come down. A half cent per gallon one day, a full penny a gallon the next, and now by two cents a day.

Today, the national average price of self-serve regular is $3.828 a gallon, down about 16 cents a gallon from the May 5 peak. That's even cheaper than the price a month ago, when gas average around $3.86 a gallon.

“Three weeks removed from the largest one-week drop in crude oil prices in the history of the NYMEX, and two weeks removed from a more than ten percent decline in wholesale gasoline prices, drivers have finally begun to feel some relief at the pump,” said Avery Ash, manager of federal relations for AAA.

But perhaps consumers should enjoy the “low” prices while they last. In forecasts today, both Goldman Sachs and Morgan Stanley predicted the price of both oil and gasoline will continue moving higher over the long haul. Right on cue, the prices of both crude oil and refined gasoline rose in futures trading today.