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Gas prices could go up, AAA says

Prices at the pump still nearly a $1 less per gallon than last year.

By Daniel J. Graeber
Retail gasoline prices holding relatively stable, though a spike in summer demand could send prices higher though August, motor club AAA reports. Photo by John Angelillo/UPI
Retail gasoline prices holding relatively stable, though a spike in summer demand could send prices higher though August, motor club AAA reports. Photo by John Angelillo/UPI | License Photo

WASHINGTON, July 7 (UPI) -- Though retail gasoline prices are holding steady, motor club AAA said an increase in consumer demand could lead to further spikes through August.

The national average retail price for Tuesday was $2.76 for a gallon of regular unleaded gasoline, down a fraction of a percent from Monday and relatively unchanged from one month ago. Motor club AAA said that, though some regional refinery issues caused price spikes, notably in the Great Lakes region, many consumers saw gas prices drop in time for the long July 4 holiday weekend.

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Last July, AAA said gas prices declined in the United States for all but one day for a total drop of 16 cents per gallon. Gasoline prices on this date in 2014, however, were $3.65 per gallon.

A weak market for crude oil has contributed to some of the overall decline in retail gasoline prices year-on-year. AAA finds average consumers are saving hundreds of dollars per month because of lower prices at the pump.

Crude oil prices are dropping as the status of Greek debt issues and Iranian nuclear negotiations weigh on market sentiments. Though prices at the pump have drifted lower along with oil, AAA said the future for gasoline is less than certain.

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"Consumer demand for gasoline typically climbs during July and August, and the ability of supply to keep pace with growing demand can directly impact the price at the pump," the motor club said in a weekly status report.

The U.S. Energy Information Administration said in a market report for June it expected retail prices to average $2.44 for full-year 2015 and $2.55 for next year. AAA said a weak forecast for crude oil prices could provide a governor on any major surges in gasoline prices, though potential hurricanes in the Atlantic could cause seasonal refinery issues.

"AAA still expects drivers to pay averages below $3 per gallon for the rest of the year," the motor club said.

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