Rise in gasoline prices expected to level off

By Palm Beach Business.com

DELRAY BEACH — Gasoline prices continued to push higher over the past week, but expect a pause over the week.

The U.S. Energy Information Administration reported that the average price of a gallon of regular gasoline rose to $2.97 in Florida, up from $2.93 a week ago and $2.845 a month ago.

Nationally, regular gasoline averages $2.98 a gallon, up from $2.958 gallon a week ago and $2.892 a month ago, according to the EIA.

AAA’s Fuel Gauge Report has regular averaging $3.09 a gallon in Palm Beach County, up from $3.056 a week ago and $2.968 a month ago. As usual, Palm Beach County has the highest prices in the state.

So why are observers expecting prices to level off? AAA cited China’s move to curb inflation and slow demand growth in the country was the driving factor that pushed the price of crude oil lower last week. Economists expect oil prices to decrease further this week on speculation China will raise interest rates.

“Gas prices will remain stable this week with minimal fluctuation,” said Jessica Brady, manager, AAA Public Relations. “Although consumers are seeing $3 or close to $3 a gallon prices in many areas, we don’t expect prices to increase further. If anything, prices may decrease by a cent or two. While that may not be much of a decrease, any drop in price is welcomed by already strapped consumers.”

In the longer term, EIA expects the price of crude oil to average about $84 per barrel this winter, more than $6 higher than the average price last winter, and regular gasoline to average $2.88 a gallon. Projected prices rise to $89 per barrel by the end of 2011, a $2 per barrel increase from last month’s projection, as U.S. and global economic conditions improve.  EIA expects gas to average $3 a gallon for the year.