Relax, motorists. The big run-up in gasoline prices at the pump, 45 cents a gallon in the past month, may soon ease, many oil and gas analysts say.
"Most of the increase has been taken," says Tom Kloza, chief oil analyst at the Oil Price Information Service.
The rapid rise — which has surpassed earlier predictions — has been driven by expectations of a global economic recovery later this year and seasonal increases from Memorial Day to the summer driving season, industry analysts say.
The national average price for a gallon of regular gasoline was $2.50 Sunday, auto club AAA says. That's up 55% for the year and higher than the average $2.23 a gallon that the U.S. Energy Information Administration (EIA) had projected for the summer. But it's far below the $4 a gallon of last summer.
Oil prices have likewise jumped. They hit $66.31 a barrel on Friday, up 30% in May. They've similarly been driven higher by expectations of an economic recovery.
Benchmark crude for July delivery rose $2.27 Monday to settle at $68.58 a barrel on the New York Mercantile Exchange, the highest close since early November.
Brokerage CLSA Asia-Pacific Markets said its purchasing managers index rose to 51.2 from April's 50.1 on a 100-point scale, indicating that the world's third-largest economy might be recovering from a slump. Numbers above 50 show an expansion. The state-sanctioned China Federation of Logistics and Purchasing reported that its index had eased, but that manufacturing was still expanding somewhat.
When crude prices were heading toward $150 per barrel last year, many energy analysts believed the booming economies of China and India would support energy prices globally.
That did not turn out to be the case and there is little tangible evidence to suggest that the rapid rise in energy prices can be sustained for long this summer.
Also affecting prices: The EIA, which is the Energy Department's statistical arm, said last week that U.S. crude oil stocks fell 5.4 million barrels in the week ended May 22.
Refineries increased gasoline production to 85% of their capacity during the same time, the EIA says, though that's still down from a more normal rate of 91%.
The increase in production may signal a bottoming of weak demand for gasoline, says Phil Flynn, energy analyst at Alaron Trading.
Still, he says, gasoline prices are "close to the peak."
Gas prices could stabilize even if oil rises because refineries could continue to kick up production, he says.
Prices could start to fall this month — though not by as much as they rose in May — if expectations for a rebound in demand for gasoline prove too rosy, says Jim Ritterbusch, president of oil trading advisory firm Ritterbusch and Associates.
Others aren't so sure. Oil companies will parlay rising crude oil prices into higher pump prices no matter the demand, says Michael Fox, executive director of the Gasoline & Automotive Service Dealers of America, which represents 450 gas retailers in Connecticut.
"There's nothing going on but pure gouging by oil companies," Fox says. "There's no rational reason for gas prices to go up."