Recession ensures gas prices won’t hit 2008 peaks

The AAA estimates 32.4 million Americans will travel this weekend.

HOUSTON (AP) — As tens of millions tank up and hit the road for Memorial Day weekend, gas prices are rising fast enough to revive painful memories of the $4-a-gallon summer of 2008.

Rest easy: The economic slack created by the recession all but guarantees prices won’t spike the way they did last year, analysts say.

On Thursday, a gallon of unleaded averaged $2.36. That’s much cheaper than the $3.80 it cost this time last year, but prices are still up about 30 cents a gallon this month, enough to make drivers flinch.

“Uh-oh,” cab driver Jay Biyani said while filling up this week in Manhattan. “That’s the first thing I say when I pull into this gas station each day. Right now it’s not that bad, but it’s a lot worse than two weeks ago.”

Even so, the auto club AAA estimates 32.4 million people, or about one in 10 Americans, will travel over the holiday, most of them driving. That’s a slight 1.5 percent increase from 2008.

Vacations make a lot more sense for many families than they did last year. Airfares, hotels and tourist attractions are all cheaper this year because of the relentless recession.

Gas is no exception. For much of this year, there has been a glut of gasoline in storage around the country, keeping prices low. And demand has been light because of the poor economy.

But gasoline has jumped in May. Oil refineries, trying to make money just like any other business, are taking in less oil because of the glut in gas, and those cutbacks are showing up at the pump.

At the same time, prices are starting to rise for seasonal reasons. Americans drive more in summer, and federal and state laws require different, more expensive gasoline blends this time of year.

The trading markets are at work, too. By mid-February, the price of oil had fallen so far — below $34 a barrel, compared with a peak of $147 last July — that large investors couldn’t resist buying in.

Last May, U.S. motorists were spending about $1.4 billion a day on gasoline, Kloza says. These days, it’s only about $874 million. And even though more people are traveling for Memorial Day, IHS Global Insight, which studies travel habits for AAA, expects Americans to take 20 million fewer trips from April to September than they did last year.