Tags: Oil Prices

Analysts: Gasoline Prices May Dip After Thanksgiving

Friday, 19 Nov 2010 01:49 PM

Filling up at the pump for Thanksgiving weekend will likely cost Americans the most in three years. After that, analysts say, prices should drop as weak winter demand takes effect.

Gasoline prices reached $2.89 a gallon earlier this week and appeared set to eclipse the high for the year of $2.92. A number of factors, from rising oil prices to lower U.S. production due to seasonal refinery maintenance, contributed to a 5-cent increase in retail gas prices in the past month.

But oil prices have retreated almost 7 percent in the past week, a decline that will soon show up at the pump. And gasoline demand will tail off once Americans are done with their road trips for the long holiday weekend.

"Probably as soon as the turkey's done, you'll start to see prices head back down," PFGBest analyst Phil Flynn said.

The national average for a gallon of unleaded regular gasoline was $2.883 Friday, according to AAA, Wright Express and Oil Price Information Service. That's still about a quarter more than a year ago. Any price above $2.64 per gallon will be the highest average price on the day before Thanksgiving since gas sold for $3.09 on Nov. 21, 2007.

Tom Kloza, chief oil analyst at Oil Price Information Service, predicted the national average will drop toward $2.75 a gallon during the winter.

Oil rose about 14 percent from Labor Day through Nov. 11, bringing up gas prices with it, as the Federal Reserve's plans to stimulate the U.S. economy weakened the U.S. dollar. That made oil and commodities like gold more of a bargain for buyers who use other currencies. That reversed in the past week as investors became concerned that China's effort to slow economic growth would curtail demand for energy.

The price Americans pay at the pump largely depends on the price of oil as well as federal and state taxes.

Motorists who live along the West Coast, in Illinois and Maine are among those paying the highest prices, with the average ranging between $3.532 a gallon and $2.995 a gallon. The lowest prices were in the Midwest, Texas and Colorado, where motorists paid between $2.740 a gallon and $2.689 a gallon.

Benchmark oil for December delivery fell 67 cents to $81.18 in early trading on the New York Mercantile Exchange. Since the contract expires Friday, many traders have shifted to the January contract, where the price edged down 77cents to $81.65 a barrel.

In other early Nymex trading in December contracts, heating oil fell 3.08 cents to $2.2643 a gallon, gasoline lost 3.47 cents to $2.1936 a gallon and natural gas added 13.9 cents, or 3.5 percent, to $4.146 per 1,000 cubic feet.

In London, Brent crude gave up 96 cents to $84.09 a barrel on the ICE Futures exchange.

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Filling up at the pump for Thanksgiving weekend will likely cost Americans the most in three years. After that, analysts say, prices should drop as weak winter demand takes effect.Gasoline prices reached $2.89 a gallon earlier this week and appeared set to eclipse the high...
Oil Prices
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2010-49-19
Friday, 19 Nov 2010 01:49 PM
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