Gas prices up but not in overdrive

Gas prices predictably crept up as thousands of Missouri motorists prepared to hit the road this weekend, but the economic slack created by the recession all but guarantees prices won’t spike the way they did last year, analysts say.

Across the country on Thursday, a gallon of unleaded averaged $2.36. That’s much cheaper than the $3.80 it cost this time last year, but prices are still up about 30 cents a gallon this month.

At most gas stations in Sedalia, regular unleaded gasoline hovered around $2.20 per gallon at the start of the weekend. While gas prices spiked more than a dollar higher last year, area drivers continue to embrace the thrifty driving habits developed last year.

On Friday, Sedalia resident Ralph Cage Jr., 50, filled up his tank for just $1.63. Cage sold his car about a year ago and switched to using his moped as his primary mode of transportation ever since.

“It’s fun. It gets good gas mileage and it lets you feel the weather and elements of nature,” Cage said.

His scooter gets more than 60 miles per gallon and rarely costs more than $2 to fill up, Cage said. He does not plan to switch back to a car anytime soon, although he said he has had to learn to drive more defensively.

Cage, who is taking electronics classes at State Fair Community College, said he decided to switch to a moped because gas prices put a pinch on his budget. He said he has had a difficult time finding a job in his field, so he appreciates the cheaper roadway alternative.

As Kristee Lorenz filled up her hybrid sports utility vehicle Friday, she said her family has also made some adjustments in their driving habits. They bought the hybrid to cut their use of gas and help out the environment, she said.

Lorenz, who works as an assistant principal at Smith-Cotton High School, said her family will not be traveling this Memorial Day weekend, but they plan on taking a vacation during the summer break.

“We will probably stay in the state this year for our vacation,” she said.

Lorenz is not alone in adjusting her driving plans this year. A GMAC Insurance Group survey found that almost 30 percent of drivers reported they plan on driving less over the next 12 months, despite gas prices being significantly lower than they were last year. Concern about the economy and cutting costs due to financial problems were the top two reasons cited for a reduced driving schedule, according to the survey.

Even so, the auto club AAA estimates 32.4 million people, or about one in 10 Americans, will travel over the holiday weekend, most of them driving. That’s a slight 1.5 percent increase from 2008.

Vacations make a lot more sense for many families than they did last year. Airfares, hotels and tourist attractions are all cheaper this year because of the relentless recession.

Gas is no exception. For much of this year, there has been a glut of gasoline in storage around the country, keeping prices low. And demand has been light because of the poor economy.

But gasoline has jumped in May. Oil refineries, trying to make money just like any other business, are taking in less oil because of the glut in gas, and those cutbacks are showing up at the pump.

The trading markets are at work, too. By mid-February, the price of oil had fallen so far — below $34 a barrel, compared with a peak of $147 last July — that large investors couldn’t resist buying in.

Investing momentum feeds on itself, and government data suggests speculative trades are on the rise, meaning people are buying in simply because they know they can sell for a quick profit.

“There’s no lack of gasoline right now or the lack of ability to produce it, and anyone who says speculators are not playing a role in this run is delusional,” said Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service.

Darin Newsom, senior energy analyst at DTN in Omaha, Neb., said he expects the average price for regular unleaded to push $2.80 a gallon this summer — higher than many other forecasts. Even if a devastating hurricane strikes, he thinks prices will stay below $3.10 a gallon.

“Not everyone is running their refineries full blast,” said Bill Day, a spokesman for Valero Energy Corp., North America’s largest refiner. “That will certainly help cushion the blow if there’s a hurricane this year.”

 — Associated Press writer John Porretto contributed to this report.