People planning their summer vacations will be relieved to know that top energy experts think regular gas prices have peaked for the year a hair above $4 a gallon.
High gas prices have been the top consumer complaint this year, and they have been zapping growth in consumer spending and the economy overall.
But relief appears to be on the way — albeit with a lagged effect owing to the threat of flooding in critical refineries along the Mississippi River. Some analysts say average pump prices could retreat by as much as 25 cents, thanks to a rout in global markets that has sent oil prices plunging to well below $100 a barrel.
"While we are not out of the woods, most experts seem to think we may have hit the peak," said Frank Maisano, an energy consultant.
He noted that gasoline-price guru Trilby Lundberg predicted an 8- to 12-cent drop even before oil and wholesale gasoline prices tanked in global commodity markets in the last week on evidence that U.S. and global consumers are curbing their purchases of fuel because of high prices.
Ms. Lundbergs spot-checks around the country suggest the U.S. average pump price got to a likely peak of $4.01 around May 4 before the rout that took premium crude prices down from more than $114 a barrel to $98 in New York trading Thursday.
Now, Ms. Lundberg says she expects a decline of 12 cents or "far more" before Memorial Day if the drop in crude prices is sustained. That would mean the peak price this year would fall 10 cents short of the all-time high of $4.11 set in 2008.
Other reports, such as the weekly U.S. Energy Information Administration survey, put the current average gas price at $3.97 for the week that ended Monday.
Wholesale gasoline prices — the prices charged by refineries and paid by gas stations — have plunged in tandem with the drop of more than 15 percent in crude prices in the past week. Unbranded pump prices are already down by 21 cents.
Gasoline-futures prices experienced a particularly sharp fall of 8 percent in New York trading Wednesday after a report from the U.S. Energy Department showed that Americans have cut back on their driving, causing an unusual 2.4 percent drop in demand for fuel.
Summer is the peak season for driving in the U.S., and gas prices usually rise during the spring as refineries are gearing up, purchasing crude oil and increasing their output to accommodate the need for more gas. Also adding to prices each spring and summer, stringent environmental regulations require refiners to subject summer fuel blends to extra purification processes to avoid air-pollution problems.
But while a run-up in gas prices is normal before Memorial Day, the rise this year was exacerbated by an explosion of political unrest in the Middle East oil-producing region, which sent crude prices well above $100 a barrel.
Market analyst Ned Brines said the collapse seen in oil prices in the past week hasn't filtered down to consumers because of worries about critical refineries along the Mississippi River, which is cresting at record flood levels this week.
A large share of the nation's refining capacity is located on the Mississippi corridor between Baton Rouge, La., and New Orleans.
"The gasoline pressure should be temporary, and if the oil pullback holds, we should begin to see some relief at the pump," Mr. Brines said.
The break in prices couldn't come too soon for American consumers, whose free-spending ways have been hampered in recent months by the high cost of filling up.
A report from the Commerce Department on Thursday showed how purchases of gasoline are cutting into spending elsewhere. It found that retail sales rose by a seemingly solid 0.5 percent last month, but when gas sales were excluded, they inched up by only 0.2 percent.
Meanwhile, higher fuel prices accounted for three-quarters of a 0.8 percent jump last month in prices paid by producers, the Labor Department reported.
"The substantial pullback of crude-oil prices below the $100 a barrel mark should help alleviate some of the pressure," said Gregory Daco, senior economist at IHS Global Insight. "This is welcome news for households."
Some energy experts think the setback in gas prices will be short-lived at best.
John Hoffmeister, former president of Shell Oil Co., expects that after a brief respite, gas prices will surge to $5 in 2012, driven by burgeoning demand for oil around the world.
"We will see a slight tapering off, and that may continue through the summer," because of the recent drop in oil prices, he told Platts TV. But after that, "I think we're going to keep seeing global demand pushing gas prices up."
Mr. Hoffmeister noted that Americans are "angry and discouraged" about high gas prices, and that has provoked the usual show of political gamesmanship on Capitol Hill.
Democrats are blaming "Big Oil," and Republicans are blaming Democrats for blocking offshore drilling.
Mr. Hoffmeister said the Washington response is "typical of the failed policies of the last 40 years," which have failed to find broadly supported, bipartisan solutions to the nation's chronic energy shortages.
"We knew this high gas price was coming back, as sure as the sun comes up in the morning," he said. "We knew global demand was catching up with global supply."
The tight balance in global oil markets as nations like China and India consume more and more oil makes high gas prices "inevitable" unless the U.S. goes all out to open up and exploit its own available energy resources, he said.
© Copyright 2015 The Washington Times, LLC. Click here for reprint permission.