Gas prices in Hawaii have started to drop and should stabilize this summer, an energy expert at the East West Center said today.
After setting records on a nearly daily basis for the last month, the average price for a gallon of regular gas has fallen about 3 cents since last Thursday’s record of $4.594. The average price of a gallon of regular gas today is $4.562, down about a half cent from yesterday, AAA’s report says.
"The market will come down if nothing else happens," said Kang Wu, a senior fellow in energy economics at the East West Center in Manoa. Wu said barring more unforseen world events, such as the Libyan unrest or fires and floods at U.S. refineries, oil supplies are rising and demand for gasoline is falling which should bring prices down by the end of the year.
In Honolulu, motorists are paying an average of $4.455, about 2 cents less than last week. Hilo’s price of $4.537 is 4.6 cents less than it was yesterday and nearly 6 cents lower than last week’s price.
Even Wailuku, which has seen gas prices just below $5 a gallon, has lower gas prices. Maui motorists are paying $4.933 a gallon, down from $4.958 yesterday and $4.954 last week.
"Any price relief is good for consumers," said Elaine Beno, a spokeswoman for AAA Hawaii. But Beno said it’s too early to tell if the drop is a long-term trend.
Some analysts have suggested that gas prices may drop by 50 cents this summer. Wu is more cautious, saying that he believes prices should stabilize this summer and will drop by the end of the year.
Hawaii’s gas prices remain the highest in the nation. The average price of gas in the U.S. is $3.962 a gallon.
Oil fell below $100 a barrel in New York today and gasoline tumbled the most in more than two years after an Energy Department report showed that U.S. supplies surged and fuel demand slipped.
Gasoline inventories increased 1.28 million barrels to 205.8 million, the first gain in 12 weeks. Total fuel consumption declined 0.9 percent to 18.2 million barrels a day, the lowest level since June 2009.
"We have a tremendous glut," said Todd Horwitz, chief strategist at Adam Mesh Trading Group in New York. "The rally in commodities appears to be over. We’re going to see prices work their way lower in coming weeks."
The Associated Press and Bloomberg News contributed to this story.