HARTFORD, CT (WCBS 880 / AP) - A sagging economy is taking the pressure off oil prices, says analyst Peter Beutel.
He says the recent drop in gas prices at the pump over the last two weeks could continue through Labor Day and told WCBS 880 Connecticut Bureau Chief that, “We’ve already seen pump price revisions of about $0.08, so I expect that we could see another $0.12 or more showing up at the pump – over the next week or two.”
Beutel says that’s provided we don’t see something like a hurricane in the Gulf of Mexico to push prices back up.
CBS MoneyWatch’s Rebecca Jarvis also reports that more people are expected to get away for the Labor Day weekend.
AAA expects 34.4 million people to travel at least 50 miles from home between Sept. 2 and Sept. 6. That’s up nearly 10 percent from 2009 - one of the lowest Labor Day volumes in AAA’s record keeping history - and below the 45 million who traveled during the Labor Day weekend in 2008.
It’s an indication that there is some pent-up demand for trips, but people are watching their budgets carefully as they worry about the sluggish economy, AAA Travel Services Director Glen MacDonell said.
“We’re a little concerned on the fall and whether or not people will start to pull back on their wallets,” he said. “This holiday, again relatively to last year, is up.”
During the holiday, most Americans will stay near home, driving mostly to visit relatives or friends. The average round trip - by air, car and other means - is expected to be about 635 miles, compared with 645 miles in 2009.
About 91 percent will travel by car, 5 percent by plane and the rest by rail, bus or boat.
Drivers are getting a break on gasoline prices, which have remained relatively stable, below $3 a gallon for most of the summer. AAA projects the average price of a gallon of unleaded regular gas will range between $2.65 and $2.75 during the holiday weekend.
Prices for other things are higher. AAA says airfares are up about 9 percent from Labor Day 2009. Car rental rates are 7 percent higher and hotel room rates are 2 percent to 6 percent above last year.
AAA estimates that travelers will spend about $697 over the weekend, about $50 more than last year.
Dining, shopping and visiting relatives and friends were the three planned activities most frequently mentioned by travelers surveyed.
AAA’s travel forecasts are based on research by IHS Global Insight, an economic research and consulting firm in Boston, and on reservation data from 1,000 AAA offices in North America.
Beutel says the expected slide in oil prices also should bode well for home heating oil prices this fall.
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