Labor Day Gas Prices at 4-Year Low

NEW YORK (MainStreet) — Travelers who are driving out of town for the Labor Day weekend can take advantage of the recent steady decline of gas prices reaching a four-year low.

Prices at gas pumps across the country are averaging $3.42 a gallon, according to Gasbuddy.com. The lowest price is in South Carolina where gasoline prices are $3.15 a gallon, $3.23 in New Jersey and reaching $3.83 in California. The highest gas is in Hawaii at $4.28.

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Regular gasoline retail prices decreased to an average of $3.61 per gallon in July, which is 8 cents per gallon below the average price in June, the Energy Information Administration said. Regular gasoline retail prices are projected to continue to drop to an average of $3.30 in December.

The EIA expects regular gasoline retail prices to average $3.50 in 2014 and $3.46 in 2015, compared with $3.51 in 2013.

Gasoline prices will continue to retreat and could reach a new four-year low, said Chris Faulkner, CEO of Breitling Energy, a Dallas oil and gas exploration and production company. The national average last week was $3.44 per gallon, which was 15 cents cheaper than then same period a year ago.

"We anticipate nearly 35 million Americans traveling this Labor Day, which is the most that we have seen in six years, which means the price at the pump is definitely driving those decisions," he said.

The catalyst in the steep decline in prices is because record high oil production is "pushing prices down across the board" as the world "clearly has more oil than it currently needs at the moment," Faulkner said.

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"We saw oil prices continue to retreat as the market continued grappling with signs of an abundance of crude and tensions easing around the world," he said. "All signs point to an oversupply of crude oil, and this will impact the price of oil and in turn push down the price of gasoline, which is something every American has been waiting for."

Consumers should not expect gas prices to continue to move downward, he said.

"I don't think we will continue to see much more movement in gasoline prices from where they are today through Labor Day," Faulkner said. "I predict gas will remain range-bound, so the old saying of 'what you see is what you get' applies to gas prices as they are today."

Despite the growing turmoil in the Middle East, global oil prices along with U.S. gasoline prices declined in recent months, said Bernard Weinstein, associate director of the Maguire Energy Institute at Southern Methodist University in Dallas.

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The oil production from shale plays continues to expand at a rapid pace in the U.S. with production rising 50% in just the past three years.

"This has helped put downward pressure on both global oil prices and domestic gasoline prices," he said. "Since we're importing a lot less, more oil is available for the rest of the planet from OPEC and other non-OPEC producers."

Drivers should be "relatively happy" this Labor Day because gasoline prices are at a four-year low, Weinstein said.

"I bought regular gas today for $3.09 and some stations in Texas are actually just under $3.00 a gallon," he said. "Barring some global political catastrophe, such as NATO going to war with Russia, I believe oil and gasoline prices will remain stable or decline slightly during the fall and winter."

Prices should remain fairly steady for the weekend, said Clint Werth, general manager of supply and trading of Atlas Oil Company, a Taylor, Mich. national fuel supply and distribution company.

"Over the next 30 days, we should see some decline as we move out of summer grade gasoline," he said. "These predictions can be easily disrupted by a hurricane, refinery issue or a change in a geopolitical issue."

One of the best ways to save money is to fill up your tank on Wednesday or Thursday before 10 a.m., said Faulkner. Buy gas when it's cooler during the day such as early morning or at night to reduce gas evaporation.

"Gas prices rise on Thursdays in anticipation of weekend travel," he said. "Unless it is an emergency, do not buy gas on Friday, Saturday or Sunday."

Paying attention to your car's warning signs such as the 'check engine' light can alert drivers to problems that affect their car's emissions output, reduce fuel economy and cause mechanical damage, said Art Jacobsen, vice president of CarMD.com Corp., the Irvine, Calif. provider of automotive information.

"While it may seem like your vehicle is driving just fine, it's often guzzling extra gasoline," he said.

The number one most common cause for "check engine" repairs is a faulty oxygen sensor, which measures the amount of unburned oxygen in the exhaust and tells a car's computer when there is either too much or not enough fuel compared with oxygen for ideal operation.

"It costs less than $250 to fix, but can lead to as much as a 40% reduction in gas mileage if ignored – that's more than $900 extra per year in fuel costs," Jacobsen said.

To find the best deals for gasoline, websites such as GasBuddy.com display gas station maps with prices, said Villanova School of Business Economics Professor Peter Zaleski.

"Most newer cars display an mpg gauge," he said. "Drivers can utilize that feature to determine what driving styles maximize mpg.

Consumers should check their credit card rewards programs since several of the "quarterly bonus" cards have gas as their bonus category, said Matthew Goldman, CEO of Wallaby, the Pasadena, Calif. credit card rewards maximizer.

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"If you have a Discover it Card or a Chase Freedom card, you can earn 5% cash back now through September 30," he said. "For more reliable, year-round savings, you can get the American Express Blue Cash Preferred Card or the Bank of America BankAmericard Cash Rewards Card for 3% cash back on gas. If you are a BofA customer with a checking account, you can even get an extra 10% bonus and can receive 3.3% cash back on gas."

- Written by Ellen Chang for MainStreet

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