U.S. energy stockpiles continue to rise, the fall has been a bit warmer than normal and with the economy faltering, fuel use is down. Seems like gasoline prices should be lower as you hit the road for the holiday weekend, right?
Sorry, not so.
AAA says the national average price for a gallon of self serve regular was $2.64 on Monday, about a penny and half less than one month ago but 72 cents more than last year.
In Houston the average price for a gallon of self serve regular was $2.45, versus $1.71 a year ago.
Road travel should be up about 2.2 percent this holiday over last year (which shouldn’t really be that hard given last year was a 25 percent drop from the year before).
Tom Kloza of Oil Price Informaiton Service (which provides AAA with its data) tells USA Today gas prices could become a drag on consumer spending with the nation’s unemployment rate hitting 10.2% last month.
“When we dipped into the recession, cheaper energy was a silver lining,” Kloza says. “That silver lining has disappeared and that will test this recovery.”
In the next month Kloza expects oil prices to be twice the level of last year, a situation that rarely occurs. Oil has traded between $76 and $82 a barrel for more than a month. Initially, it was driven higher on expectations of an economic recovery and a weak dollar. Because oil is priced in dollars, a falling dollar drives oil prices up.