Retail gasoline prices have fallen from the start of May by more than 20 cents per gallon as optimism about a strong economic recovery begins to wane. All markets have taken a hit as jobless claims and the European debt crisis spook traders and market movers who are more concerned about a double dip recession than a return to boom times. The current national retail average of $2.72 per gallon is still higher than 2009 by more than 10 cents, but last year the market was rising and this year it’s collapsing.
Demand for gasoline has been stronger in 2010 compared to 2009, but still off by more than 1 million barrels per day from where it peaked back in 2007.
Most analysts believe prices will remain weak for the remainder of the summer and that the highest prices of the year are behind us. Crude prices have been tied to expectations about the economy. If the sentiment is that the economy will rebound, than prices will ultimately rise. However, if sentiment is that growth will be non-existent and the stock market tanks, than prices will see further drops.
Meantime, Diesel prices have fallen about 15 cents to $2.99 since peaking at $3.13 per gallon, and experts believe that diesel prices will follow gasoline south unless sentiment changes
