Gas prices fall below last year's Labor Day weekend

  • Article by: JOHN EWOLDT , Star Tribune
  • Updated: August 29, 2014 - 11:54 PM

The usual bump ahead of Labor Day hasn’t materialized – and prices could drop further.

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Gas prices this weekend are 5 percent lower than a year ago.

Photo: Daniel Acker, Bloomberg

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Drivers will fill their gas tanks for less this Labor Day weekend, with prices about 5 percent lower than they were a year ago.

Nationally, the pump price is about $3.44 per gallon, the lowest late-August price since 2010, according to AAA.

In the Twin Cities, the average price on Friday was $3.36. Last year, local drivers paid $3.56 a gallon during Labor Day weekend.

“I usually think of gas prices going up for Labor Day, so this is a nice surprise,” said Maureen Putnam of Sartell, Minn., as she filled up at Bobby & Steve’s Auto World on Washington Avenue S. in Minneapolis on Thursday. “I drive 48 miles each way from Sartell to Princeton, so lower prices make me very happy.”

Typically, gas prices rise for the holiday weekend, then fall until mid-November. September, October and November often have the lowest gasoline prices of the year, said Patrick DeHaan, senior petroleum analyst at GasBuddy.com.

He attributes lower prices to North American oil production at four-decade highs, lower demand, and record high summer refinery runs with few shutdowns. “This has allowed the energy markets to shrug off violence in Iraq,” DeHaan said.

This price break is expected to last into fall. By Veterans Day, much of the country could be looking at prices below $3.25 and thousands of stations across the country may offer gas for $3 per gallon.

DeHaan thinks the Twin Cities could also see prices below $3, barring any refinery issue or geopolitical flare-ups. Stations that might break the $3 threshold are likely to be in Burnsville, Coon Rapids, Eagan, Maple Grove and Shakopee, areas that typically see the lowest prices in the Twin Cities.

On Thursday, stations in those areas had prices as low as $3.18 per gallon. The last time the Twin Cities saw prices below $3 was in February, DeHaan said.

A year ago, gas sold for an average of $3.59 and, two years ago, it was $3.83, a record high for Labor Day, according to AAA.

A recent uptick in prices in the Twin Cities in the past few days can be attributed to the cyclical nature of retailers restoring their profits after price cuts.

Meanwhile, Labor Day is not a particularly high volume time at the nation’s airports, but passengers are encountering fares that are about 2 percent higher than a year ago, according to Airlines for America, a trade group. Car rentals are stable at $51 a day, AAA said.

 

John Ewoldt • 612-673-7633

  • States most likely to see stations selling for less than $3 per gallon this weekend include New Jersey, Virginia, South Carolina, Tennessee, Mississippi, Alabama, Arkansas, Louisiana, Oklahoma and Texas.

    • The most expensive Labor Day gasoline happened in 2012 when prices averaged $3.83 per gallon.

    • Demand is expected to be about 9.1 million barrels per day, down about 500,000 barrels per day from peak holiday levels in 2006 and 2007.

    • The cheapest gasoline in August has been in South Carolina, averaging $3.16 per gallon. Hawaii is the most expensive at $4.32.

    Source: GasBuddy.com

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