It’s also a heavy travel weekend. And this Memorial Day weekend, about nine out of ten holiday travelers will take to the nation’s roadways, opting to drive instead of fly, according to the 2013 AAA Travel Memorial Day Forecast.
So, what prices can these motorists expect to see at the pump?
Prices are actually fairly close to what they were last year, said Jim Patterson, associate editor at The Kiplinger Letter, a Washington, D.C.-based publisher of business forecasts and personal finance advice.
In 2012, he said, the average gas price over Memorial Day weekend was $3.68, and the average now is $3.66. Locally, gas prices hovered around $3.79, according to GasBuddy.
“I think that prices will actually either stay where they are or fall maybe a cent or two,” Patterson said. “We’ve had a modest rise in the past few weeks, from $3.50 to $3.66. It’s been a slow, steady rise and that is about over for the moment, even with more people driving.”
In any case, more than 60 percent of travelers AAA surveyed said fuel prices won’t affect their plans.
Summer gas outlook
Gas prices generally rise in the summer, because of increased demand and more expensive summer blend fuel, which typically adds anywhere from a nickel to 10 cents a gallon, Patterson said.
This year, he and other experts expect gas prices to be slightly lower than they were last year.
“It should stay somewhat within the range of $3.50 and $3.70 looking to July or August,” he said. “I don’t see anything dramatic happening unless the broader economy picks up or worsens more than we expect it to.”
Wally Tyner, a Purdue University agricultural economist who specializes in energy economics and policy, expects prices in the Midwest to be between $3.50 and $3.90 a gallon this summer.
“That certainly could change if something unforeseen happens,” he said, but this year he expects increased oil production and the move to cars with greater fuel efficiency to create a better balance.
“Oil production is growing faster than consumption,” he said. “Oil production’s been going up every year for the past five years. More oil means lower prices in general.
“On the demand side, our consumption has been falling. In 2007, we were consuming 142 billion gallons and now we are consuming 133 billion gallons,” he said, referring to the nation’s annual consumption.
But people should know that there are two trends in gas prices, Tyner said, global and local. And the Midwest has been most affected by local trends in recent months.
Rapid spikes — as much as 20 cents up or down — in gas prices have occurred when refining facilities in Whiting, Ind., and Joliet, Ill., experienced breakdowns, he explained. At the Whiting refinery, the biggest in the Midwest, one of its four lines was out and its output dropped considerably.
So, while the U.S. Department of Energy predicts the Midwest will have lower gas prices than the national average this summer, Tyner said, the region’s prices currently are higher than the national average and second only to the West Coast.
Once the “bottlenecks in getting the fuel to the pumps,” is resolved, he said, prices should drop.
But, he added, gas prices are unpredictable and this year prices have not followed typical patterns.
“In January, normally gas goes down, but this year it went up,” he said. “Then, in March, it usually goes up and it went down. And I think we are going to have a repeat of those opposites this weekend, because the refinery is back on-line.”