Gas Prices Could Be Below $3 In Some Places By Memorial Day

3:27 PM, Apr 20, 2013   |    comments
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When it comes to gasoline prices, what goes up usually goes up - particularly in heavier spring and summer driving seasons.

Not this year.

After a sharp early year run-up that was expected to continue propelling prices up to $4 or more a gallon by late spring, pump prices have reversed course and continue to slide.

Nationally, a gallon of gas now averages $3.51, down 18 cents over the past four weeks and 37 cents lower than year-ago prices.

With crude oil prices slumping, prices are expected to fall another 20 cents a gallon by Memorial Day. Meanwhile, April consumption is the lowest since 1997.

"To see this much weakness in demand for this time of the year is pretty eye-opening,'' says Patrick DeHaan, senior energy analyst at price-tracker gasbuddy.com. "You can attribute some of the decline to more fuel-efficient vehicles, changes in lifestyle, high (crude oil) inventories or an economic slowdown."

Last week, the government reported oil inventories at about 388 million barrels, about 4% higher than year-ago levels. Benchmark West Texas intermediate crude oil opens trading Monday at $88.01 a barrel - 14% lower than April 2012 levels. Wholesale gas futures are trading around $2.60, another positive sign for lower pump prices in the weeks ahead, DeHaan says.

In some states, prices could fall below $3 a gallon.

California, currently averaging $3.94 a gallon - the highest in the continental U.S. - could see prices dropping to $3.75 a gallon, DeHaan says.

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