Gasoline prices appear to have leveled off for the summer, but drivers will still find the second-highest prices ever for a Fourth of July holiday.
A tight crude oil market and the high-demand summer driving season have kept gasoline prices from falling further from their March records. Now, the biggest question is whether current gasoline supplies are enough to prevent price spikes during the rest of the summer, analysts say.
"It's still touch-and-go and cross-your-fingers time," said Tom Kloza, director of the Oil Price Information Service. "It's like the lunch rush at a restaurant. That's what we're in right now for the gasoline business."
Lawrence-area drivers paid an average of $1.47 a gallon for regular unleaded gasoline on Thursday -- up 13 cents from a year ago -- ahead of what is traditionally the summer's heaviest travel period, according to AAA.
About 37.4 million people plan to travel 50 miles or more from home this holiday weekend, which would mark the heaviest July 4 travel in nine years, AAA said. Of those travelers, 32.6 million plan to go by motor vehicle.
Gasoline supplies should be high enough to meet demand through the summer, the U.S. Energy Information Administration said Wednesday.
"The most surprising reason for relatively stable gasoline prices likely stems from the level of demand that has been anything but robust this year," the EIA said Wednesday.
Even though Americans consumed a record 9.5 million barrels a day of gasoline last week, demand during the last four weeks was down about 2.4 percent from last year.
The nation's commercially available crude oil supplies stood at 282.1 million barrels at the end of last week, almost 12 percent lower than they were a year ago, the EIA said. Gasoline stocks fell 3.2 million barrels last week to 205 million barrels, or about 11 million barrels below last year's level.
Gasoline prices across the nation averaged about $1.49 at the end of last week, according to the EIA. That was down a penny from the previous week, but almost a dime more than a year ago. It's also far from the record $1.73 reached on March 17, just before the war in Iraq started and prices started their steady fall.
The highest-ever gasoline prices leading into the July 4 holiday came in the summer of 2000, when a gallon of regular unleaded gas averaged almost $1.63, according to EIA data.
Most analysts expect crude oil prices to drop once the high-demand summer clears and Iraqi exports hit the market in larger numbers later this year.
"I think we're stabilizing right now, and the world's waiting out issues like Iran and Nigeria," said Mark Baxter, director of Southern Methodist University's Maguire Energy Institute.
The general strike in Nigeria -- the world's eighth largest oil exporter -- helped keep crude oil prices above $30 a barrel. Oil for August delivery fell 25 cents Wednesday to $30.15 a barrel on the New York Mercantile Exchange.
A hurricane or sudden U.S. refinery outage over the next two months could lead to brief price spikes of a nickel or dime, but after that the worries should be over, Kloza said.
"The numbers you're going to be paying on Thanksgiving Day and Christmas Day are going to be considerably below what you're paying for on July 4," he said. "I would suspect that we're looking at a lot of retail markets flirting with $1.10 or $1.15 by the end of the year, as opposed to some of the hyperbole predictions of $3."