GRAND RAPIDS, Mich. - West Michigan drivers should expect to pay more at the pump as the beginning of the summer travel season draws near.
This week they saw gas prices spike to more than $3. At most locations the cost of a gallon of regular unleaded was $3.09. This jump puts prices up 14 cents from last week.
By Friday prices had dropped a few pennies. But, they are the highest they've been in the past three years. Patrick DeHaan, a petroleum analyst for Gasbuddy.com, says as we enter the Summer driving season, prices will likely remain higher than they've been in recent months.
"It is Economics 101. It is basically supply and demand," he said.
Memorial Day Weekend is the unofficial beginning of the season. According to AAA, more than 41 million Americans will travel over the holiday. That is up 5 percent from last year. The majority of them, 36.6 million, will travel by vehicle.
"A very strong economy and low unemployment means Americans are driving to work and have disposable income," says DeHaan.
In addition to an increase in demand, he says OPEC production cuts and the current political situation in the Middle East is contributing to the gas price increase.
"What we're seeing now is that US oil inventories are 89 million barrels lower than last year and gas prices have continued to rise as a result," said DeHaan. "I think there are also some uncharted waters moving forward and a lot could be contingent on whether US partners will go along with our sanctions on Iran."
Despite what he calls that "wild card," DeHaan predicts prices over $3 a gallon will be the exception not the norm.
"Gas prices for most of the summer will probably be in the upper $2 a gallon mark," he says. "It is possible we could see more time above $3 a gallon, pending the outcome of sanctions on Iran. But, I still think $3 is not going to be common for the summer. Factoring everything that is possible, in kind of a worst case scenario that you could talk about for this summer, I really can't imagine a scenario that would take gas prices over $3.30 or $3.40 a gallon. And, I still don't think they will get there."
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