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JERSEY CITY, N.J. -- Consumer demand may do what the declining price of crude oil has, for the most part, failed to do: bring down prices at the pump.
Over the past couple of months gas prices hovered near, and in some cities climbed above, $4 a gallon for the first time since 2008. As a result, motorists are filling up less and some are even forgoing their usual summer road trips to save on gas.
According to Businessweek.com, MasterCard Advisors said retail gasoline demand declined 2 percent last week compared to a year earlier. Prices have inched down 3.9 percent since the national average reached a high of $3.985 a gallon on May 4.
"Higher prices were the function of a speculative bubble, well beyond any sort of fundamental justification," said Stephen Schork, president of energy consultant The Schork Group Inc. "The market is correcting now."
Relief at the pump may not come in time for Memorial Day weekend. As the news outlet reported, AAA expects car trips over Memorial Day weekend to slip 0.3 percent from a year ago. However, things could change by July 4.
"We've seen some demand erosion from higher prices, not demand destruction," said Bill Day, spokesman with Valero Energy Inc. "Demand always erodes when prices go up. When prices start going back down or consumers get used to the higher prices, you see demand go back up."
Earlier this month, the Energy Department cut its forecast for summer gas prices by 5 cents to $3.81 a gallon, according to Businessweek.com. But even with that reduction, the price is up from $2.76 from April through September 2010, the department said in its monthly Short-Term Energy Outlook. In the same report, the government reduced its estimate of 2011 demand by 0.4 percent to 9.05 million barrels a day.