Energy Department says gas prices should fall after Labor Day

Gas prices should reach $3.30, analysis shows.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |  Aug. 28, 2014 at 9:19 AM
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WASHINGTON, Aug. 28 (UPI) -- Gasoline prices in the United States should fall by at least 13 cents as demand wanes after the Labor Day holiday, the U.S. Energy Department said.

The Energy Information Administration, which crunches numbers for the Energy Department, said a decline in the price of Brent crude oil, the global benchmark, was the main driver behind lower gasoline prices in the United States.

Oil prices account for more than half of the price at the pump. Brent as of Monday was priced at $100.49 per barrel, up about $1 from the previous week. For Thursday, Brent was priced at $102.72.

Nationally, motor club AAA said the price for a gallon of gasoline was $3.43 per gallon, two cents lower than Monday. EIA said Monday's price was the lowest price on the Monday before Labor Day in four years.

Looking ahead, EIA said the monthly average price per gallon is expected to keep falling through the end of the year to reach $3.30 by December.

"Gasoline prices often fall after Labor Day as seasonal demand wanes and the market shifts to winter fuel specifications, which make greater use of low-cost fuel components," EIA said.

Price monitoring website says prices are moving modestly higher ahead of the long holiday weekend. A fire at a BP refinery in Whiting, Indiana, could cause prices in the Midwest to rise faster than national trends.

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