The Energy Department’s latest survey, conducted Monday, found… (Jim Michaud, Associated…)
Gasoline prices dropped around much of the nation for the second straight week, an Energy Department survey showed.
But don't get too excited.
History suggests that prices will rise at least a few more times in the next few weeks, analysts said. Fuel prices have peaked before mid-May just once in the last 20 years, according to Energy Department statistics, and it hasn't happened since 1998.
The Energy Department's latest survey, conducted Monday, found that the national average for a gallon of regular gasoline fell 1.7 cents to $3.922 since the previous Monday. The average was 7.8 cents higher than a year earlier.
In California, the average price fell for the fifth straight week, to $4.235 a gallon, off 4.5 cents since the previous week and down 14.1 cents from its high so far for the year of $4.376 a gallon. The California price is 3 cents higher than a year earlier.
The national average last peaked before May 14 on Jan. 12, 1998, at $1.094 a gallon, according to Energy Department records. In 11 of the last 20 years, gasoline prices have peaked between mid-May and Labor Day. During the other eight years, prices peaked between October and late December.
"Prices have tended to peak in May and then they fall throughout the summer," said John Kilduff, founding partner of the New York investment firm Again Capital. Part of the driving force for higher prices in May is speculation over whether summer gasoline supplies will be sufficient, he said.
Phil Flynn, an analyst for PFGBest Research in Chicago, said gasoline prices historically peaked around the Fourth of July holiday. Flynn said that ended after 1995, when the federal government mandated a different, more expensive and cleaner burning summer blend of gasoline to help lower air pollution.
"The switch-over from cheaper winter blends to summer blends is usually over by the beginning of May, and that's one reason why prices tend to rise in May," Flynn said.
Prices are difficult to predict, said Patrick DeHaan, senior petroleum analyst for GasBuddy.com, a website that tracks fuel prices.
"The only thing I remain sure of with gasoline prices is that things will remain quite volatile the next four to six weeks," DeHaan said. "Last week we saw a refinery fire on the West Coast drive up prices instantaneously. It's these events, the unforeseeable reaction, that gives me reason to say that prices may continue to swing upward and down."
On Monday, Brent North Sea crude fell $3.15 to $118.68 a barrel in London trading. Brent is the basis for the price of most U.S. oil imports. The U.S. benchmark, West Texas Intermediate crude, rose 10 cents to $102.93 a barrel on the New York Mercantile Exchange.