Pinch at gas pump eases for consumers
Gas prices in North Dakota for regular unleaded hit $3 a gallon May 5, but that mark was short-lived because of falling crude oil prices.
The Oil Price Information Service said prices fell for the 26th straight day Tuesday, with the national average down 20 cents from May 6 at $2.727.
"We're being told there are large amounts in inventory, and as long as there's no supply disruption, we will not hit $3 a gallon, but that could change at the drop of a hat," said Mike Rud, president of the North Dakota Petroleum Marketing Association.
With ample inventories and only a modest increase in demand, gasoline prices may have peaked early this year, AAA North Dakota said in a news release.
Most stations in Grand Forks are posting $2.69 a gallon. That's down 24 cents from a month ago but still an 18 cent increase from a year ago, according to the website fuelgaugereport.com. The price for diesel fuel fell 21 cents by the end of May to $2.949, 64 cents more than last year.
Prices in northwestern Minnesota reportedly get lower as you near the Canadian border. The regular unleaded price quoted by Cenex in McIntosh was $2.619 compared with $2.59 in Karlstad. SuperAmerica in Crookston also quotes $2.59. The website minnesotagasprices.com lists the state average at $2.568.
Have gas prices peaked?
Despite the British Petroleum oil spill in the Gulf of Mexico, ongoing Middle East tensions and the threat of hurricanes in oil drilling regions, the outlook on whether gas will hit $3 again this summer is mixed.
Some analysts said the price will fall because the nation's high unemployment rate cuts into gas consumption, yet the Energy Information Administration reported consumption is up 1.2 percent from a year ago.
"I expect to see gasoline prices look like a roller coaster in the next few months," Jessica Brady, AAA public relations, told the Athens (Ga.) Banner-Herald. She added gasoline would peak at $3 before dropping off.
Albert Danielsen, director of the University of Georgia's Bonbright Utilities Center, said in the same article that the BP spill is from an exploratory well and will not impact the U.S. supply.
Tom Kloza of the Oil Price Information Service said while the daily streak of lower prices is likely to end before mid-June, prices have another 10 or 12 cents to fall.
The Associated Press quotes analysts saying the national average could fall to $2.65 a gallon by the Fourth of July.