Gas price exceeds $4, but good news may be near
On a day when the average price of a gallon of gas passed $4 for the first time since 2008, AAA Mid-Atlantic says it has good news about fuel prices.
AAA spokeswoman Ragina Averella said the group's oil analysts believe that with Wednesday's 3-cent increase in the Maryland average to $4.005, the market is at or near its top. She said they expect a few weeks of volatility, followed by a significant decrease in prices at the pump.
Averella, who participated in a conference call with AAA analysts Wednesday, said AAA is unsure whether the decreases will come quickly enough to affect Memorial Day travel plans. But she said the group expects to see prices in the $3.25-$3.75 range -- and "maybe even lower" -- by July and August.
"We see prices reasonable enough that people will be taking trips," she said.
Averella noted that crude oil prices plunged 15 percent Friday to reach their lowest levels in two years -- even though they partially rebounded early this week. She said Maryland's 3-cent overnight increase, which followed several days of flatness or modest declines, may be related to flooding along the Mississippi River.
Averella said the Oil Price Information Service believes high prices have already reduced demand for gasoline by 3-5 percent -- more than in some other estimates. She said gas prices have already peaked and are on their way down in high-priced markets such as California.
The AAA spokeswoman said the national average lags Maryland's by about 5 cents and has yet to cross the $4 mark -- though prices in many metropolitan areas have been there for weeks.
The current Maryland average is just short of the $4.05 record set in June 2008.