Record gasoline prices could make this holiday weekend memorable for all the wrong reasons.
The average cost of a gallon of unleaded gasoline in Colorado hit a record $3.77 on Wednesday, according to AAA’s Daily Fuel Gauge Report. Premium gasoline averaged $4.21 a gallon, and diesel is at $4.48 in Colorado, with little relief in sight as the busy travel season kicks off.
“It is not unusual to see the highest gasoline prices of the year at the end of May,” said Eric Escudero, spokesman for AAA Colorado.
A switch by refiners to costlier fuel blends and higher demand in the summer cause a seasonal rise in gasoline prices. Prices typically level off through the summer and decline after Labor Day.
What is different this year is that oil, which accounts for about 75 percent of the cost of gasoline, continues to set new highs — $134 a barrel being the latest on Wednesday.
A weak U.S. dollar, besides making oil costlier here, appears to be driving a wave of speculation in commodities, said Mark Larson, executive director of the Colorado Wyoming Petroleum Marketers.
And The Wall Street Journal reported today that the International Energy Agency was preparing a report that would say future oil supply “could be far tighter than previously thought.”
Oil prices have doubled since a year ago, but gasoline is only 19 percent higher. Consumers are driving less and margins are thin for gasoline retailers, Larson said. And prices keep rising.
“We are being told that there is not going to be a supply issue at all,” Larson said. “Supply is plentiful.”
That wasn’t the case last Memorial Day weekend, when refinery problems lifted the average price for regular unleaded to $3.34 a gallon in Colorado versus $3.20 for the U.S.
With higher gasoline prices this year, a study by AAA estimates 37.9 million Americans will travel 50 miles or more from home this holiday, a slight decrease from last year.
In Colorado, a gallon of regular averaged $3.71 in Denver on Wednesday, according to AAA. But at least one station in town, the Conoco at Denver International Airport, was charging more than $4 a gallon for regular.
Aldo Svaldi: 303-954-1410 or asvaldi@denverpost.com
