You’ve probably noticed that the price of unleaded gasoline has inched up over the past few weeks. That’s typical gas price behavior as Memorial Day approaches, and motorists set off on summer vacations.
Forbes reported that the good news, according to a Purdue University researcher, is that gas prices this summer ought to be significantly lower than they were in summer, 2014.
Purdue energy economist Wally Tyner is predicting that gas prices will remain below $3 a gallon for unleaded, except in California and Hawaii where prices are normally higher than in the rest of the country.
The average price of unleaded fuel last week was $2.71 a gallon, according to AAA. Although the price has gone up steadily the past month, it’s still 94 cents a gallon cheaper than at this time a year ago.
One reason Purdue’s Tyner expects prices to stay below $3 is that there is plenty of crude oil supply available. Tyner pegs the current level at 485 million barrels, compared with a normal level of about 350 million barrels.
U.S. energy production actually has fallen lately, for the first time in two years, in part because the price is trending between $50 and $60 a barrel. When the price is higher, energy companies are more likely to invest in production, but this price range is holding off some new investment, he says.
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