The first week of May brings with it some annual traditions -- Cinco de Mayo and Kentucky Derby parties to name two of the more festive.
Here's another one that's much less celebratory: an uptick in the price of gasoline.
Pegged to the looming onset of the summer driving season and to the tendencies of gasoline refineries to turn over inventories, commodities traders, wholesalers and retailers, all seemingly marching to the same drum, tend to push prices up as if acting right on cue, several industry analysts contend.
Last week, the national average price for a gallon of gas jumped a nickel to $2.90, the U.S. Energy Information Administration said Monday.
"Gasoline futures always seem to peak right around the first week of May," explained Tom Kloza, chief oil analyst at Oil Price Information Service. "The gasoline market gets oversold in the winter, and traders need an excuse to push prices up -- the mythical summer driving season."
But this year there is one additional variable in the mix: the massive oil spill in the Gulf of Mexico.
Oil Spill Speculation
According to one veteran energy trader, the spill, which shows no sign of abating, could eventually affect shipping lanes in the Gulf, leaving refineries along that coast shut off from crude supplies.
"It's something we are definitely watching," said Anthony Grisante, a futures trader on the floor of the New York Mercantile Exchange. "We could have a situation where ships can't get through the oily water, or they get coated in oil and can't get to the port because it's too dangerous, so if that happens then the refineries could be shut in, and gasoline prices could start to spike."
Not so fast, stressed Phil Flynn, veteran energy analyst at PFGBest.
"Refineries are operating at 89 percent, so there is spare capacity, and we have an oversupply of crude," he said. "The industry would need to experience major, historic disruption in the shipping lanes in the Gulf for gas prices to be impacted. I don't see it. What's happening in Greece and fears of an overall economic funk is having much more of an impact on oil prices, not the spill."
Gas Prices: $3 Per Gallon Likely
To put the spill in perspective, OPIS's Kloza pointed out that while 5,000 barrels of oil are believed to be leaking per day, by comparison all U.S. refineries process in aggregate about 15 million barrels per day. Rumors of shipping lane disruptions are way overblown, he said, possibly the result of traders trying to goose prices.
"In 2005 and 2006, refinery capacity was maxed out, so there was some rationale behind summer gas price spikes, but that is simply not the case with refineries anymore," Kloza insisted. "Between excess capacity, oversupplies of crude and ethanol subsidies, it is very doubtful we will see the kind of volatility in gasoline prices we saw a few years ago."
Kloza's bottom line: The national average gasoline price could hit as high $3 a gallon in the coming months, but probably won't go much higher.
For motorists, that's cause to celebrate.