Gas prices fall to begin busy travel week

ASSOCIATED PRESS

Retail gasoline prices headed downward to begin one of the country’s busiest travel weeks, with more than 33 million people expected to hit the road for the Thanksgiving holiday.

Americans are remaining closer to home because of anxiety about the economy and demand for gasoline is weaker now than it was last year at this time.

That is telling because a gallon of gasoline then cost only $1.93 as the economic crisis unfolded in 2008.

Unlike last year, however, gas is not falling sharply and though prices fell overnight, it still cost $2.64 per gallon on average, according to auto club AAA, Wright Express and Oil Price Information Service.

“I think we will see some increases in the spring, like we always do,” said Fred Rozell, retail pricing director at OPIS. “But at this point, I think we’re going to kind of see a status quo for a while.”

Crude prices have remained relatively strong, which has helped keep gas prices well above $2.50.

A survey by the AAA this weekend found that the number of Americans traveling away from home for Thanksgiving will be up just 2.1 percent this year from 2008.

Oil prices jumped early in the day and nearly touched $80 before falling. Crude prices have dragged retail gasoline prices higher throughout the year.

Benchmark crude for December delivery fell 10 cents to $77.37 a barrel on the New York Mercantile Exchange, partly because of surprising housing numbers.

The National Association of Realtors said home sales rose 10.1 percent in October. That is the highest level in more than two years and helped push crude prices higher on expectations of increased demand.

Still, crude in storage is above normal levels for this time of year and refiners that turn oil into gasoline, jet fuel and diesel are cutting back because demand is so weak.

Valero Energy became the latest to shut down a refinery Friday, the largest U.S. facility shut down so far this year.

That follows other refiners such as Sunoco and Western Refining, who have shut down plants in recent months and off almost 1,000 workers.

Refiners say they can’t raise the price of gasoline and jet fuel because people aren’t traveling as much, but they must pay higher prices for crude because of the weak dollar.