Holiday gas prices down from last year

Across Massachusetts, regular unleaded gasoline was selling for an average $2.67 a gallon yesterday, according to the newest survey by the American Automobile Association and Oil Price Information Service. That compares to $2.87 a month earlier, and the same $2.87 a year earlier.

With a so-far mild hurricane season inflicting no major disruptions on US gasoline refining and transportation networks, "the trend has been a gradual easing of prices, which is good," said Art Kinsman, a spokesman for the AAA's Southern New England chapter. "Perhaps this fall will see better prices."

AAA is forecasting zero growth in travel demand this Labor Day weekend compared to last year. It estimates 34.6 million Americans will travel more than 50 miles over the holiday, the same as last year, with a slight increase in people traveling by air offsetting a slight change in people traveling by car or recreational vehicle, Kinsman said.

Financial markets and the US Energy Department are sending hard-to-reconcile signals this week about future gas prices. Earlier this week, the government reported the country had at current consumption rates just 20 days' worth of gasoline in storage during the week that ended last Friday. That's the lowest inventory since the data began getting collected in 1991. Fears of tight supply often cause speculators to bid up the price of gas.

But yesterday, in trading on the New York Mercantile Exchange, contracts for delivery of gasoline in October fell 0.7 percent in price, as prices retreated from a run-up earlier in the week.

Wholesale gasoline prices can be especially volatile in September in New England because many retailers try to keep their supplies tight and use up as much as they can of the more-expensive summer-formula gasoline required by air-pollution laws before they can switch to cheaper winter blends in the last two weeks of September. Because gasoline evaporating from tanks is a major creator of smog, the Environmental Protection Agency requires gas stations in New England to sell during summer months a blend of gasoline - usually costlier - that evaporates less readily than standard colder weather blend.