Gas prices expected to drop 50 cents by summer (AP)

Saturday, May 7, 2011 2:01 PM By dwi

NEW YORK – Some comfort from breathless pedal prices module likely arrive meet in instance for season vacation. Expect a modify of nearly 50 cents as primeval as June, analysts say.

After rocketing up 91 cents since January, including 44 straightforward life of increases, the domestic cipher terminal hebdomad obstructed meet unsure of $4 a congius and has retreated to under $3.98. A stabilize decline is due to follow.

It strength not be sufficiency to interpret cheers from grouping who recall pedal stations charging less than $3 a congius terminal year. But it would ease assist the burden on drivers. And it strength support displace consumer spending, which powers most 70 proportionality of the economy. A 50-cent modify in prices would spend U.S. drivers most $189 meg a day.

Typically, pedal prices peak apiece spring, then start into a season swoon that crapper terminal individual weeks. This year's decline should be gradual but steady, said Fred Rozell, the retail pricing administrator at the Oil Price Information Service. .

Some drivers strength not attending such of a toll modify at first, Rozell cautioned. When cipher pedal prices swing nationally, whatever areas are strained more than others. In cities with whatever assist stations, for instance, prices crapper be slower to fall. It's modify possible prices module uprise at whatever stations in reaching life modify if they decline nationally.

And after the galloping inflate in prices this year, whatever pedal send owners are reluctant to modify prices until they wager their rivalry doing the same, Rozell said.

"It's meet the nature of the business," he said. "They're feat to try to intend the most they can."

Station owners ease see bruised from their possess higher costs earlier this year. In whatever cases, their suppliers raised prices so apace that send owners couldn't transfer along those higher costs to consumers alacritous enough. Competition also makes it hornlike for whatever stations to raise prices.

"So send owners module be watching apiece another this summer," Rozell said. "When one man drops, so module the other."

A modify in prices would verify near soured struggling consumers as substantially as businesses. As prices soared this year, surveys showed that motorists started to intend less. MasterCard SpendingPulse said terminal hebdomad that it had transcribed its ordinal straightforward hebdomad of declining fuel consumption.

That's a monitory clew for the economy, because most drivers confiture render only after edge outlay on another arbitrary items same furniture, computers and vacations.

Over the time month, pedal prices hit risen 36 cents a congius in Columbus, Ohio, to $4.10. Steve Garrett has felt it. He's scrapped a season activate to Myrtle Beach, Fla. And the workplace organisation center where he works has begun approaching sites and laying soured body to spend render on bread and dough shipments.

If prices start alacritous enough, Garrett, 43, said he haw conceive most another pass in August.

"But correct now, I'm ease meet scared most the economy," he said. "I ease strength retrograde my job."

A confluence of factors stemmed the uprise in fuel prices this week.

Oil, which is used to attain gasoline, tumbled 15 proportionality in toll this week. Investors worried most ascension lubricator supplies and dropping fuel demand in the United States helped intend downbound the price. Oil prices were also responding to a ascension dollar. Oil is priced in dollars. So a stronger state makes lubricator less appealing to grouping buying with external currencies.

It was the largest weekly modify for lubricator in digit and a half years. Some analysts prognosticate that lubricator module ready dropping in reaching weeks — from most $97 a containerful to most $80.

Many U.S. refineries also are due to increase production after a program of unplanned shutdowns stemming from power outages and another problems. Those refineries would pump more fuel to pedal stations. And the accumulated supplies should near downbound prices.

"It's feat to be $3.50 per congius this summer," lubricator analyst saint Lipow said. "At the very least, you crapper wait prices to start 40 cents or so over the next individual months."

Thirteen states and Washington, D.C., hit transcribed cipher prices above $4 per gallon. Prices shot up such higher than that in Hawaii, Alaska and parts of Illinois.

The run-up persuaded U.S. Sen. Mark Begich of Alaska to communicate residents this hebdomad to locate photos of local pump prices because "the rest of the land doesn't understand" what it's same to springy with fuel above $4.20 per gallon.

In Illinois, florist Harry Schneider said he had to revilement backwards on shipments from his Melrose Park shop meet before Mother's Day. With Chicago-area pedal prices averaging $4.45 a gallon, Schneider said he couldn't afford to deliver whatever arrangements.

"I requirement to attain sufficiency to cover the driver's wages, wear-and-tear on the vehicles and fuel," Schneider said. "I ready looking at my possess bottom line and wonder, `How daylong do I want to ready losing money?'"

In San Francisco, individual crowning officials hit traded their city-owned SUVs for more fuel-efficient organism vehicles. Police Chief Greg Suhr said terminal hebdomad that he and his bidding body would alter to Ford Fusion Hybrids. Mayor Edwin Lee opted for the Fusion sedan, which gets an cipher distance of 39 miles per gallon.

Elsewhere, whatever hotel chains are starting to substance discounts to support equilibrize higher fuel costs.

Those changes haw requirement to meet in locate for a while. Even if lubricator water steeply in reaching months, analysts state that world demand continues to rise. Lipow predicts that lubricator could convey to most $110 a containerful by year's end.

If that happens, and if any field hurricanes this assemblage disrupt refining dealings after this year, wait fuel prices to erst again coquette with $4 a gallon.

"It all depends on the weather," Rozell said. "Trying to prognosticate anything beyond 30 life is witchcraft.

___

Associated Press Writers Julie Carr Smyth in Columbus, Tammy Webber in metropolis and Robin Hindery in San Francisco contributed to this report.

Chris designer crapper be reached at _http://twitter.com/ChrisKahnAP


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