Bay Area gas prices steady for holiday

August 29, 2008 7:26:37 AM PDT
You might want to top off your gas tank early, before hitting the road for Labor Day weekend. That's because high gas prices may be about to jump up even higher - because of a threat thousands of miles away.

Oil market speculation is that consumer gas prices will rise during the Labor Day holiday as tropical storm Gustav swirls dangerously close to the Gulf of Mexico. It has the potential to damage or delay some of the oil rig production there. But so far, there have been no signs of soaring prices.

In fact, Friday morning one San Jose station dropped its price by four-cents a gallon. And this comes in the face of the oncoming storm.

Perhaps the lower prices will inspire some last-minute road trips, even though AAA projects a one-percent drop in the number of Americans traveling this weekend.

While high gas prices have affected travel, some choose just to limit the distance of their trips. One travel website's survey found that 31-percent of Americans will travel this weekend, and the same number of Bay Area residents will too. A majority of those will drive rather than fly.

AAA says the national average for a gallon of regular gas is about $3.66 - almost $1 higher compared to a year ago. Oil analysts have been expecting that if tropical storm Gustav gets ugly, it will bring a price spike. More than 4,000 oil and gas rigs are scattered throughout the gulf, as well as dozens of oil refineries along the coastline from Texas to Louisiana. Some oil companies have already evacuated workers due to the danger.

Market watchers believe storm fears have pushed crude oil barrel prices up on Thursday, but then they settled down with the speculation that the government could release supplies from the strategic petroleum reserve, in order to counter any drop in production from Gustav.

Since the path of the storm and gas prices is unclear - it's perhaps a wise move to top off now, whether or not you're taking a road trip this holiday weekend.


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