Expect an Increase in Gas Prices This Month
The AAA outlook for August shows the spillover effect of steeply climbing July prices.
AAA released its weekly fuel gauge report yesterday, showing a sharp increase in gas prices throughout July and predicting that prices will remain high through Labor Day.
National gas prices increased 5.1 percent, or 17¢ a gallon, to close out July at $3.50 a gallon. That's the first monthly increase since March and the largest increase for July since at least 2000, when AAA began keeping records.
If it seems like prices had been lower this summer, they were. Fuel costs had fallen for three consecutive months, reaching a summertime low of $3.326 July 2. By month's end, the national average had hit $3.50 (a high of $3.52 in New Jersey).
In its most recent report, AAA predicts with "medium-high" confidence that gas prices will remain flat or climb slightly by Labor Day. That would buck a historical trend, as gas prices have fallen every August for seven of the last ten years. The summer driving season ends around Labor Day, and refineries transition to less-expensive fuel blends.
AAA attributes the high prices to rising crude and ethanol prices, geopolitical concerns in the Middle East and the general state of the global economy.
Other potential factors include U.S. unemployment data, European debt developments, the Atlantic hurricane season, and events in the Middle East.
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