The Energy Department cut its forecast May 10 for summer
While gasoline prices may not be down by orange 15 dresses Memorial Day on May 30, history suggests they will be lower by July 4, when 32 million typically take to the roads for the Independence Day holiday. The U.S. Federal Reserve said April 27 that rising commodity prices are likely to have a “transitory” effect on inflation.
Pump prices were $1.66 a gallon over crude oil futures in New York on May 6, the largest premium since September 2008, according to data compiled by Bloomberg. That compares with an average of 95 cents in the past five years. In 2008, it took two months for the gap to return to average.
Demand ‘Erosion’
“We’ve seen some demand erosion from higher prices, not demand destruction,” said Bill Day, a spokesman for San Antonio- based Valero Energy Inc., which owns and operates about 1,000 branded stores, with another 4,800 franchises in 45 states. “Demand always erodes when prices go up. When prices start going back down or consumers get used to the higher prices, you see demand go back up.”
Car trips over the Memorial Day weekend will slip 0.3 percent from a year earlier, the first decline in three years, Heathrow, Florida-based AAA, the nation’s discount herve leger dresses largest motoring organization, said May 19.
Demand for the motor fuel declined 2.2 percent to 8.91 million barrels a day from the same month last year as prices were up 6.6 percent from the prior month, the industry-funded American Petroleum Institute said in a report May 20.
“Higher gasoline prices are damping demand,” said John Felmy, chief economist with the Washington-based API. “This is just a price reaction.”
Demand Forecast
The Energy Department cut its forecast May 10 for summer gasoline prices by 5 cents to $3.81 a gallon. That’s up from $2.76 from April through September last year, the department said in its monthly Short-Term Energy Outlook. In the same report, the government reduced its estimate of 2011 demand by 0.4 percent to 9.05 million barrels a day. It was the third grey herve leger dress straight month the outlook was trimmed.
Gasoline futures, the best-performing commodity this year in the Standard & Poor’s GSCI Commodity Index, have slipped 14 percent this month as concern eased that flooding on the Mississippi River would inundate refineries and disrupt fuel output in Louisiana. The U.S. Army Corps of Engineers opened spillways earlier this month to divert water, reducing pressure on levees to avoid flooding at plants that account for about 14 percent of U.S. red bandage skirt fuel-making capacity
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