Gas prices may have hit spike

After weeks of heading upward, gas prices might finally be reined in by the law of supply and demand.

AAA Mid-Atlantic reported Monday that after rising each day for the past 54 days — a new record — gas prices re-mained steady Monday and will probably start downward after the Fourth of July weekend.

Saturday and Sunday saw slight increases above Friday’s average price of $2.69 a gallon in the U.S., making Sunday’s increase the 54th day in a row that gas prices have risen, ac-cording to a AAA-Mid-Atlantic news release.

The current price is up five cents more than motorists were paying a week ago and up $1.07 since the first of the year, but still below the record of $4.11 last July.

“Over the past few months, speculation and the weak dollar have been the root cause behind the rise in oil prices, and consequently, the $1-a-gallon increase in gas prices,” Martha Meade, AAA-Mid-Atlantic spokesperson, said. “But speculation can only carry the market so far, especially when the basic fundamentals of supply and demand indicate prices should be moving downward.”

Meade said AAA-Mid-Atlantic expects gas prices to increase slightly leading up to the Fourth of July weekend and then, if wholesale gas prices continue to decline, begin to slide down after the holiday weekend.

The wholesale cost of gas — what the gas station pays for the refined product — declined 5.8 percent last week, which was the first weekly decline in five weeks and the biggest weekly loss since Feb. 20. The cost then fell 10.51 cents, or 5.2 percent, on Friday to settle at $1.92 a gallon by afternoon.

Prices had dropped 2.5 per-cent to $69.55 by the close of the trading day on Friday — the first time in nine days the price closed at less than $70.

The record peak of crude oil prices was set last July at $147 a barrel. Friday’s price, however, was more than double the $32.40 a barrel low in De-cember.

Demand for gasoline has averaged almost 9.3 million barrels per day the last four weeks, according to The Energy Information Administration, which is up 1.1 percent from the same period last week, in “normal demand growth,” according to the release.

“That indicates that Americans are driving more,” Windy VanCuren, a AAA Mid-Atlantic spokesperson, said. “In addition, more Americans drove over this past Memorial Day holiday than they did in 2008, indicating that they are no longer reducing their driving due to the poor economy. That being said, gas prices have gone up since Memorial Day, so it could have an effect on the July 4th holiday travel.”

The American Petroleum In-stitute reported that the total oil demand for May and the year-to-date dropped 4 percent, making it the largest slide of any May in 10 years.

OPEC President Jose Vas-concelo said last week that if oil prices remain stable, the group will not need to cut production the rest of the year. He said the price of $70 to $75 a barrel is “positive for the economy,” according to the release.

Other worldwide factors affecting the price of crude oil and, consequently, gas prices could be the political unrest in Iran and disruptions to Nigeria’s oil supplies from attacks by militants following the country’s presidential elections.