AAA: Gas prices could drop by summer

AAA says it doesn't expect the national average to rise above $3 gallon this year, and prices could return to near $2 per gallon in some areas by the summer.

"There is a real hope that gas prices could drop significantly in time for the busy summer driving season," AAA spokesman Avery Ash said. "The overall outlook looks good for drivers, and with any luck we will avoid the types of problems that often lead to higher gas prices at this time of year."

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Many refineries have completed seasonal maintenance, though unexpected problems could still occur. Many refineries and wholesalers will switch to more expensive summer-blend gasoline by May 1 to meet EPA clean air regulations.

The cost of crude oil is likely to be the most important factor influencing gas prices over the next few months. Many experts believe that crude oil prices may drop further because of abundant supplies, but international conflict, declining production or other issues could result in higher prices.

There is a glut of petroleum around the world that has helped to keep prices at the lowest levels since 2009. Domestic oil production remains about 14 percent higher than a year ago. U.S. commercial crude oil supplies are about 24 percent higher than a year ago, while gasoline supplies are about six percent higher than a year ago. In addition, a nuclear deal with Iran may allow that country to export more crude oil, which would further increase global oil supplies.

There remains a possibility that oil prices could rise despite abundant supplies. Most recently, the market has been concerned that the conflict in Yemen could lead to violence in major oil-producing countries, such as Saudi Arabia.


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