Gas demand is up, but prices keep falling

ATLANTA — Heavy demand hasn’t slowed the steady decline in gas pump prices, which hit an 11-year low for the Fourth of July weekend.

The biggest concern now for motorists may be an act of nature.

“(Monday’s) gas prices ended just as GasBuddy predicted a week ago: $2.27 per gallon nationally,” said Patrick DeHaan, senior petroleum analyst for GasBuddy. “While prices have come down, we now head to the time of year when hurricane season enters the picture.

“In the last couple of years, we have seen minimal to no disruption as hurricane season largely went by with no major storms that hit land. Should we see a major hurricane enter the Gulf, gas prices may react.”

According to both the GasBuddy and AAA Daily Fuel Gauge reports, the national average price of a gallon of gasoline was below $2.27 Tuesday, down slightly more than 3 cents a gallon in a week and down 9-10 cents from last month. Year-to-year, the surveys have U.S. motorists paying about 50 cents less per gallon.

In Georgia, the surveys Tuesday were at $2.122 (GasBuddy) and $2.126 (AAA), a 3.5- to 4.2-cents improvement in a week and about 15 cents better than last month. The AAA Daily Fuel Gauge Report also looks at Georgia’s eight largest metro areas, which were led Tuesday by Albany, which was averaging $2.015 a gallon, down just over a nickel in a week and a 16.3-cent decline from last month. Year-to-year, metro Albany motorists were saving an even 50 cents per gallon. AAA’s highest reported average in the state Tuesday was metro Savannah’s $2.16.

“It doesn’t matter how high gas prices get; it doesn’t matter how low they get,” Errol Hart, of Albany, said Tuesday as he filled up his pickup truck. “All I know is we all got to get some.”

And a large number of motorists did over the holiday weekend, which ended at midnight Monday. AAA forecast a record-breaking 36.3 million Americans would travel at least 50 miles from home over the long weekend.

“Despite the high demand, gas prices declined throughout the holiday weekend, making travel even more affordable,” said Mark Jenkins, a spokesman for AAA Auto Club Group. “This year’s summer driving season is likely to set new records for both gasoline demand and vehicle miles traveled.

“Gasoline demand is currently at an all-time high, which would normally put additional pressure on refineries. However, refineries are increasing output and gasoline supply has more than kept pace with growing demand, which has led to lower gas prices.”

Jenkins said it’s unknown yet whether summer prices have peaked. Experts think the high may have hit around June 11, but the stabilization of the crude oil market after the Brexit vote swoon did not move high enough to put upward pressure on gas prices.

DeHann said the most likely region to see higher prices this week is the Great Lakes area, where stations have undercut one another to the point of losing money.

“Any way you slice it, this summer has featured the cheapest Memorial Day, July 4 and perhaps Labor Day in the last 11 years, and motorists have been responding by hitting the roads in record numbers, according to a GasBuddy study before the summer driving season began,” DeHaan said.

The Gulf of Mexico has been quiet since hurricane season started June 1. On Tuesday, the NOAA National Hurricane Center reported that tropical cyclone activity was not expected to develop for at least two days. Weather officials have noted, however, that the El Nino effect in the Pacific Ocean, which warms ocean water above normal temperature and inhibits hurricane formation in the Atlantic, ended in May.

NOAA officials say there’s a 75 percent chance that a La Nina, which has cooler-than-normal Pacific Ocean temperatures and usually results in above-normal tropical storm activity in the Atlantic, could form by winter. The last La Nina formed in 1995.

Staff writer Terry Lewis contributed to this report.

Herald File Photo