Those hitting the road this Labor Day weekend will experience the holiday’s lowest gas prices in over a decade. GasBuddy.com Senior Petroleum Analyst Patrick DeHaan says that’s in spite of a recent increase in prices. “As oil prices spiked in the last week or so, gas prices have trickled forward – that is, up until [Wednesday],” he says. “Now, gas prices across the state of Indiana are starting to move back downward slightly. Motorists will be faced with an average price in the $2.20-a-gallon area if they’re hitting the road for Labor Day, which is going to be the cheapest Labor Day at the pump since 2004, about 20 cents less than what we saw last year.”
DeHaan says the recent spike in gas prices actually stemmed from an over-supply of oil. “We’ve built up such a glut in crude oil now that that is what’s keeping prices of oil low,” he says. “And as that directly harms OPEC and other oil-producing countries, from time to time, they generally make comments alluding the the fact that they are going to cut production, which then very quickly causes oil prices to rally.”
He says comments from Saudi Arabia’s oil minister about potentially cutting production recently caused oil prices to spike. However, the oil markets have come to realize that the threatened cuts are unlikely to materialize, causing prices to head back down.
DeHaan expects retail gas prices to follow and says that downward trend is likely to continue. “After Labor Day, gas prices have more downward pressure,” he says. “That’s just because demand for gasoline typically drops off as the summer concludes. And by mid-September, we switch back to that cheaper winter gasoline, and that will mean more price decreases as well.” He predicts that by Halloween, drivers will see more prices under two dollars per gallon, a trend that may last through winter.