Oil prices fell for a second day Thursday, raising hopes that gasoline prices could fall after steadily rising for more than a month.
The drop in crude and slightly lower wholesale gasoline futures prices are expected to at least slow the rise in pump prices, but at least one analyst predicts prices will be higher on St. Patrick’s Day than they are now.
The average U.S. retail gasoline price has risen for 34 straight days since averaging $3.29 on Jan. 18. On Thursday it rose a penny to $3.78 per gallon.
In Alabama the average price for a gallon of regular gas was $3.65 per gallon, 44 cents more than a month ago and 22 cents more than a week ago, said Clay Ingram, public relations and marketing manager for AAA Alabama.
Ingram said production cuts, cold weather in New England and the switch to the more-expensive summer blend factor into the price, but investors and consumer behavior also have an impact.
The investment world is driving crude oil prices up by trying to get an early jump on the spring increase in prices, he said.
“There are so many investment people buying crude oil now that they’ve pushed it up a good bit higher than really is justified,” Ingram said.
Motorists have two powerful tools – fuel conservation and price shopping – to fight the surge, he said.
On conservation “we’re actually doing a great job,” Ingram said. But drivers need to be more concerned with price than convenience.
“They would rather buy their gas from a station that is easy to get in and out of the parking lot and has bright canopy lights above the pumps than go half a block farther down the street and pay 5 to 6 cents a gallon less,” he said.
If consumers were more price conscious, it could start a gas war.
“Pay attention to gas prices in your normal travel area,” Ingram said. “Make a conscious effort to buy the cheapest price you can find.”
If enough people engage in that behavior “it will put some pretty powerful downward pressure on gas prices and kind of reintroduce some competition back into the equation,” he said.
Crude oil’s recent dip is a result of ample supplies and recent speculation that the Federal Reserve may soon allow interest rates to rise, which would reduce the supply of easy cash investors have been using to buy commodities like oil.
Over the coming weeks, gasoline prices are expected to drift higher, as they do nearly every late winter and early spring when refiners close for maintenance and to switch to more expensive summer blends.
That reduces supplies of gasoline and sends prices up. Refineries are running at their lowest levels in 2 years because more plants are undergoing more extensive maintenance this year.
Tom Kloza, chief oil analyst at the Oil Price Information Service, expects the national average price to peak in March or April at somewhere between $3.80 and $4.10 per gallon. Last year gasoline topped out at $3.94 on April 6.
Oil prices were pushed lower this week by a transcript of the latest Fed meeting that showed some policymakers expressing doubts about the central bank's bond-buying program. If the Fed curtails or ends the program earlier than anticipated, that could affect economic growth and reduce demand for oil.
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The Associated Press contributed to this report.