Thanksgiving travelers will find gasoline prices much higher than last year with little hope for respite heading into the rest of the holiday season, oil and gas analysts say.The national average for a gallon of regular gas was $2.64 on Monday, slightly less than a month ago but up 72 cents a gallon from a year ago, the auto club AAA says.
Oil prices ended the day Monday up 9 cents, closing at $77.56 a barrel, indicating little change ahead for gasoline prices. "It's a fairly stable pricing environment," says Jim Ritterbusch, president of oil trading adviser firm Ritterbusch and Associates.
Thanksgiving travel provides an opportunity to gauge the mood of U.S. consumers, AAA says.
The auto club expects 2% more travelers on roadways this year than last, for a total of 33.2 million people.
The expected increase reflects improved consumer confidence, a rising stock market and growing sense among many consumers that the worst of the global economic crisis is behind us, AAA says.
Last year, Thanksgiving travel tanked 25% from the previous year in the wake of the housing and financial meltdown.
Now, gas prices could emerge as a drag on consumer spending with the nation's unemployment rate hitting 10.2% last month, says Tom Kloza, chief oil analyst for the Oil Price Information Service.
"When we dipped into the recession, cheaper energy was a silver lining," Kloza says. "That silver lining has disappeared and that will test this recovery."
In the next month, he says, he expects crude oil prices to be twice the level of last year, a situation that rarely occurs. Oil has traded between $76 and $82 a barrel for more than a month. Initially, it was driven higher on expectations of an economic recovery and a weak dollar. Because oil is priced in dollars, a falling dollar drives oil prices up.
Countering those factors are big inventories of gasoline, heating oil, natural gas and diesel fuel in the U.S., Ritterbusch says. "As long as we have unemployment above 10%, that'll keep a lid on rising gas prices or changes in people's driving habits," he adds.
The Energy Information Administration, the research arm of the U.S. Department of Energy, expects higher crude oil prices to drive gas near $3 a gallon during next year's summer driving season. Crude oil prices account for 64% of the cost of gas, the Energy Information Administration says.
While $2.64 a gallon is a national average, drivers in different areas pay more or less. The EIA said Monday that regular gas is averaging $2.94 a gallon in California and $2.84 a gallon in New York, but $2.43 a gallon in Houston.
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