Gas prices finally retreat

NEW YORK (CNNMoney.com) -- Gas prices may have finally topped out just ahead of the Memorial Day holiday as a modest decline in the average price ended a streak of 12 days of record highs.

It's unlikely the estimated 32 million drivers who will be hitting the road for the traditional start of the summer driving season will notice the savings, though, as the AAA survey Friday showed prices down only 0.2 cents to $3.225.

A modest decline in gas prices Friday ended a streak of 12 straight days of record-high prices.

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That decline will only save 4 cents for someone paying $64.50 to buy 20 gallons of gas. With that drop in price, a car getting 25 miles per gallon can go only 82 feet further, almost the distance from home plate to first base on a baseball diamond.

Still, it's the first time since May 12 that the AAA survey of 85,000 gas stations nationwide did not show a record high, and it's the first retreat in prices since May 9. The national average has now been above $3 a gallon since May 4.

Oil analyst Peter Beutel, president of Cameron Hanover, said that it's tough to read the gasoline futures market right now to predict the direction of gas in the weeks ahead.

"Traditionally what we have seen is supplies start to pick up right about now, and normally prices decline in June," said Beutel. "We could very well be at a top right now. But we're at a critical point right this minute. We've got a 30-cent move coming, but we don't know which way it's going to go."

Beutel said that if readings on refinery utilization and gasoline inventories show improvement next week, it could spark a sell-off in gasoline futures that could take gas prices down in the next couple of weeks. But if there are more supply problems reported next week, prices could quickly resume their recent climb.

Even with the record prices, AAA is predicting a record number of Americans will be hitting the road during the holiday weekend, with 38.3 million expected to travel 100 miles or more, up 1.7 percent from a year ago. And most of those - 32.1 million - will be driving, according to the motorist group.

In 21 states, drivers will find the average price still rising modestly in the latest reading. The Midwest, which has seen the sharpest price increases this week, is still seeing pain at the pump, with Ohio, Indiana, Michigan and Illinois all seeing prices higher by about a penny or more a gallon.

Ohio had the biggest price jump in Friday's reading, with gas up by 3.6 cents a gallon, giving a 17 cent a gallon spike just since Tuesday.

Michigan passed Illinois to grab the dubious title of the nation's most expensive gasoline in the Friday reading, with the average price reaching $3.532 a gallon, up from $3.508. Illinois's average price edged up to $3.515 from $3.498 in Thursday's reading.

Indiana is now No. 3, followed by Wisconsin, while California, which had had the nation's most expensive gas through this past weekend, fell to No. 5 as prices there fell by almost a penny.

Prices also declined by nearly a penny in some other western states, including Oregon, Washington and New Mexico.

Different regions of the country have to comply with different formulations of gasoline during the summer months in an effort to control smog. That can cause regional spikes as the refineries cut back production of a certain blend due to change over to make the summer formulation, or due to unplanned shutdowns.

But there is typically a regional retreat in prices once refineries reach full production of the new blends.

Unplanned outages include problems at refineries such as fires, power outages and longer-than-usual maintenance periods.

On the other end, New Jersey remains the only state with an average price below the $3 threshold, for the fourth straight day, but it continues to edge toward that benchmark. The average price in the Garden State rose to $2.957 from $2.954 on Thursday.

Ironically, New Jersey is one of only two states - along with Oregon - where the law mandates full service at every pump. It is helped by having a state gas tax of 14 cents, or about 7 cents less than the national average.

There were a total of 28 states as well as the District of Columbia where prices declined in the latest reading, with the biggest drop being a 2.7 cent decline in Minnesota.

But the average price fell by less than a half cent in six of those states where prices slipped, and between a half-cent and a penny in 15 other states, along with Washington, D.C.

Before this recent run of record-high gas prices, the highest price ever recorded in current dollars was $3.057 in the AAA survey, which was set Sept. 4-5, 2005, in the wake of Hurricane Katrina.

The only other time that the price rose above $3 a gallon in the AAA survey was a 19-day stretch in late July and August of 2006, after Israel's invasion of Lebanon sent crude prices higher.

This current spike in prices is the longest streak with gas above $3 a gallon on record.