US gasoline price should hit record Tuesday -AAA
By Matthew Robinson
U.S. average gasoline prices should hit an all-time peak on Tuesday and may break $4 a gallon in some areas this summer, battering consumers already reeling from high energy costs, according to travel and auto group AAA.
Monday's surge in crude to near $108 a barrel should be enough to lift gasoline prices averaging $3.222 a gallon now above the current record $3.227, said Geoff Sundstrom, AAA fuel price analyst.
"I would anticipate we'd hit a new record price tomorrow," said Sundstrom. "It's primarily due to the crude price."
Gasoline prices in the world's largest consumer traditionally peak later in the year, either in the spring when refiners are gearing up for the summer holiday season or during the summer itself.
But speculative investment has been driving up oil prices and boosting gasoline prices earlier than normal this year, Sundstrom said. The early record does not bode well for motor travel during the peak summer demand season, he added.
"The last time we set a price record, the price of crude was $60-65 a barrel," he said. "I think the concern that AAA has right now is what the gasoline prices might portend for the travel industry this summer."
Consumers have faced a series of record pump prices since hurricanes damaged a swathe of Gulf Coast refiners in 2005, and Sunstrom said U.S. average prices could reach $3.50 a gallon this spring with some locations expected to pay $4.
U.S. motorists already have begun adjusting their habits due to high fuel costs, with mass transit use hitting a 50-year high last year in the gas-guzzling nation as more drivers left their vehicles behind to travel. nN10373383
With the U.S. mortgage crisis and the credit crunch also hitting the wallets of consumers, and AAA is looking for signs they are scaling back travel plans further.
"We do believe that the American economy is seeing an erosion of demand for gasoline that has been ongoing since the Christmas/New Year holiday period," Sundstrom said.
"We'll be watching very carefully what travelers are telling us about their plans for the spring break period and later on what they anticipate doing over the Memorial Day holiday."