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Gas Prices to Peak Over Memorial Day Weekend

by Patti Domm, CNBC / / Source: CNBC.com

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Gasoline prices could creep up another few cents to the highest levels of the year this weekend, but it will also be the cheapest Memorial Day for drivers in five years.

"Generally, we should be peaking now. I don't personally think we're going to see this huge crazy drop in gas prices. I think we saw one in 2012 in June, but I think the big drop comes after Labor Day," said Tom Kloza, head global analyst at Oil Price Information Service.

Absent a major refining incident, hurricane or other disrupting factor, unleaded gasoline prices should peak for 2015 at about $2.75 per gallon in the next several days.

The AAA motor club expects the highest level of Memorial Day weekend travel in 10 years. It forecasts that 37.2 million Americans will travel 50 miles away from home this holiday weekend, a 4.7 percent increase over last year when gasoline prices were about 90 cents higher per gallon.

"This weekend will be peak, and we'll see slight declines as we go through the summer."

Gasoline at the pump was averaging $2.73 a gallon nationally Friday, 4 cents higher than last week and 26 cents more than a month ago, according to AAA. Kloza said he expects summer prices to hover around $2.50 nationally before dropping closer to $2-$2.25 in the fall.

"This weekend will be peak, and we'll see slight declines as we go through the summer," said Andrew Lipow, president of Lipow Oil Associates. "There's still a lot of crude oil out there that's going to temper any rises at all. But having said that, the demand for gasoline this summer is going to be very good, due to the lower prices."

Gasoline is expected to peak at about a dollar a gallon less nationally this year than last year, when the high was $3.71. Kloza said he thinks the futures market signaled the peak on May 6, when gasoline futures hit a high of $2.09 per gallon.

Memorial Day is viewed as the start of the summer driving season, and Kloza said drivers should spend about $10 billion less a month over last year's levels for June, July and August.

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