Gas prices well under last Memorial Day

LOS ANGELES, May 23 (UPI) -- Gasoline prices heading into the first of the three big summer driving holidays remained mostly steady Thursday and were well below the prices seen a year ago, according to AAA.

The auto club, which is expecting a slight increase in the number of travelers during the three-day Memorial Day weekend, pegged the national average price for regular at $1.404 per gallon, down from $1.412 a month ago and well under the $1.699 a year ago at this time.

More than 35 million Americans were expected to travel at least 50 miles from home during the weekend, up 1 percent from last year's holiday driving plans. While they will likely see pump prices below those seen at the start of last summer, analysts aren't certain that the flat trend will continue for long and won't discount the possibility that prices will be temporarily raised at the last minute.

"Motorists shouldn't be too surprised to see a slight upward bump over the Memorial Day holiday," said Auto Club of Southern California spokeswoman Carol Thorp. "However, after that we expect prices to be very close to where they are currently."

While prices in much of the nation were relatively steady, there were indications that the Midwest was on the upswing. AAA said the average price in Illinois was $1.50 per gallon, up 2 cents from last month. Cook County prices are averaging $1.583, well above the national average despite being 3-cents lower than last month.

"It is still difficult to determine where gas prices will be headed as we get further into the summer driving season," said Mark Bruno, spokesman for AAA in Chicago. "Crude oil prices are starting to edge higher. This could indicate higher gasoline prices after the Memorial Day weekend."

Crude prices on the New York Mercantile Exchange were actually softer Thursday at just over $26 per barrel for July. That compares to the final $27.33 settlement price for June. NYMEX gasoline was lower as well, running at around 79.68 cents per gallon; July gasoline was trading at around 79.97 cents per gallon.

The U.S. Energy Information Administration noted this week that crude supplies in the Midwest were continuing their steady decline of recent weeks. They were last reported at 62.3 million barrels compared to 69.3 million last spring when pump prices were set to shoot above $2 per gallon.

Last year's price spikes in the Chicago area were blamed in part on difficulties obtaining the extra ethanol-based gasoline from refineries in the Gulf Coast, needed in order to offset dwindling supplies.

The Renewable Fuels Association said this week that the ethanol industry set a monthly production record in April of 127,000 barrels per day compared to 107,000 barrels per day last April.

Wholesale spot market prices for Chicago gasoline jumped this spring from around 60 cents per gallon in February to nearly 90 cents in March and have held above 80 cents ever since.

Most U.S. refiners, however, have been keeping their crude stocks at higher levels after being caught off guard by last spring's OPEC production cuts. The plentiful crude supplies of recent genre have virtually eliminated fear of shortages that can drive wholesale prices higher.

"California refineries have averaged more than a million barrels of gasoline a day for the past eight weeks," said Steve Larson, Executive Director of the California Energy Commission. "That's as much as 9 percent above last year's production figures, helping to make fuel plentiful and less expensive."