Memorial Day is approaching and that typically means gas prices have spiked at pumps across the nation. That would be true in a typical year, but 2011 is anything but, and prices have come down in recent weeks following increases that had consumers shelling out around $4 a gallon.
Prices have dropped nearly four percent since gas hit its highest level for the year ($3.985) on May 4, according to MasterCard Advisors.
"Higher prices were the function of a speculative bubble, well beyond any sort of fundamental justification," Stephen Schork, president of The Schork Group Inc., told Bloomberg News. "The market is correcting now."
The prospect of lower gas prices has economists cautiously optimistic that consumers will continue to spend during the summer months.
"When the price of gasoline falls, people feel better," Chris G. Christopher Jr., a senior economist with IHS Global Insight, told The Boston Globe. "Maybe they'll spend a bit more or have a nicer vacation because of it.'
Phil Flynn, an oil analyst with PFGBest, told the Globe, "I think retailers are going to be vying to get people into their gas stations. It's going to be very competitive.'
AAA expects nearly 35 million American will travel 50 or more miles away from their homes this weekend for some sort of Memorial Day activity. That's about 100,000 more than did the same last year.
"Memorial Day travel experienced a gain of more than 14 percent in 2010, and this year we expect to add slightly to that gain due to an increase in air travel and an improvement in the overall domestic economic picture," said Robert Darbelnet, president and CEO of AAA, in a press release.
In a AAA survey, six out of ten said rising gasoline prices would not affect their travel plans for the holiday. Of the remaining four, 70 percent of those said they would economize in other areas to compensate and 30 percent said they would either take a shorter trip or travel by alternate transportation.
- Gas Prices Not Expected to Keep Americans Home Memorial Day Weekend, AAA says - AAA
- Gas Poised to Decline as $4 Drives Down Demand: Energy Markets - Bloomberg News/Bloomberg Businessweek
- Staycations? Not this holiday -- gas prices are down - The Boston Globe
- How gas prices will affect Memorial Day weekend spending - The Philadelphia Inquirer