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Published: Thursday, 5/25/2006

Slight rise in holiday travel predicted


Travel will be up slightly for the Memorial Day weekend despite record-high gasoline prices and rising vacation costs, AAA has predicted.

An oil industry analyst said yesterday that softening demand is what has kept fuel prices from going even higher.

"Families may travel closer to home or for fewer days, but they will continue to take vacations and plan getaways," Laurie Ghesquiere, a spokesman for AAA Northwest Ohio, said in a statement accompanying the auto club's forecast that 37.6 million Americans will travel 50 or more miles from home this weekend, a 0.9 percent increase over last year.

But average gasoline prices which according to AAA's daily Fuel Gauge Report yesterday, are 74.8 cents per gallon higher nationwide than they were a year ago - 67.4 cents higher in metro Toledo. The demand weakened just enough that so far, the $3-plus gasoline that a month ago appeared to be on the region's horizon has not arrived except at a handful of higher-priced filling stations.

"Slowly but surely, the penny is dropping and people are changing their behaviors," Bill O'Grady, an assistant director of market analysis at AG Edwards in St. Louis, said, noting that average prices for three-year-old used cars are rising while second-hand prices for thirstier sport-utility vehicles are dropping.

While domestic refinery production has not increased, Mr. O'Grady said, the springtime price run-up from the low $2s to the high $2s also has attracted more finished-gasoline imports to the United States during the last month.

Once they hit the roads, holiday travelers in the Toledo area will need to be warier of construction-related delays than they have been in recent years. Not only does I-280 remain closed in North Toledo for Veterans' Glass City Skyway construction, but I-475 and U.S. 23 both have single-lane zones in Sylvania Township and I-75 has one lane closed in each direction north of Monroe.

After tomorrow evening, however, forecasters say holiday travelers should encounter pleasant driving conditions. The National Weather Service and AccuWeather Inc. yesterday both predicted showers and thunderstorms for today, tonight, and tomorrow, but forecast sunny and increasingly warm conditions for Saturday, Sunday, and Memorial Day. The possibility of rain returned in the forecasters' outlooks for Tuesday.

Oil prices fell by almost $2 a barrel yesterday after weekly government data showed rising supplies of gasoline and flat demand. Light, sweet crude for July delivery fell $1.90 to settle at $69.86 a barrel on the New York Mercantile Exchange, where June gasoline futures declined by 8.9 cents to finish at $2.019 a gallon. In London, Brent crude for July delivery lost 58 cents to $70.42 a barrel on the ICE Futures exchange.

Michael Guido, director of commodity strategy in New York for Societe Generale, said the recent softening of demand for gasoline suggests pump prices - which yesterday averaged $2.87 a gallon nationally - are affecting consumer behavior.

"I wouldn't be surprised to see the market move down into the mid $60 range from here," Mr. Guido said.

Retail prices declined in the Toledo area to as low as $2.50 a gallon at a handful of stations early this week, before taking a preholiday jump yesterday back into the $2.70s and $2.80s for self-service, regular unleaded.

Angelia Graves, a spokesman for Marathon-Ashland Refining and Marketing in Findlay, said a crude-oil price increase on Tuesday was partly to blame for yesterday's retail hike.

Crude prices rose Tuesday following scientists' predictions about the Atlantic hurricane season and a fire at a Louisiana refinery renewed concerns about potential supply disruptions in the Gulf of Mexico. Hurricane experts said the upcoming season should be an active one, but is unlikely to be as strong as in 2005, when Katrina and Rita inflicted significant damage on oil production and refining.

The preholiday rise yesterday, however, did not go as far as Marathon-Ashland apparently would have liked. According to toledogasprices.com spotters, several Speedway stations on city's west side posted new prices of $2.899 a gallon for regular yesterday morning, only to retreat into the $2.70s when nearby competitors' prices did not rise with theirs. Speedway is a Marathon-Ashland brand for which all local outlets are company-owned.

"We assess the market every day, looking at what wholesale prices are doing and what our competitors are doing," Ms. Graves said. The price hike and retreat, she said, is "what happens in a very competitive market. Sometimes others go up first, and we decided whether to follow them."

Information from the Associated Press was used in this report.

Contact David Patch at:


or 419-724-6094.

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