AAA Reports Crude Oil and Gas Prices Down, Inventories Up

MINNEAPOLIS, May 17, 2005 -- The return of crude oil prices below $50 per barrel (selling at $48 per barrel today) and the building of U.S. gasoline inventories bode well for lower retail pump prices as summer nears. The current national average has dropped more than 8 cents since last month to $2.16 per gallon. This is nearly 12 cents below the all-time record-high price of $2.28 reached on April 11, 2005.

"Lower crude prices and higher U.S. inventories should continue to push national average gas prices closer to $2 per gallon over the next week," said Dawn Duffy, AAA spokesperson. "Prices often flare up during major travel holidays, as they are expected to during the upcoming Memorial Day holiday weekend, but they should resume their fall in early June as long as crude oil remains in the mid-$40 per barrel range."

Analysts also have noticed a decline in the sale of large SUVs and other vehicles that achieve relatively poor fuel economy. AAA has continued to urge consumers to consider fuel efficiency a top priority when selecting a new or used vehicle. However, while hybrid vehicles (those that run on both gasoline and electricity) are popular, consumers may have to join long waiting lists and/or pay thousands of dollars over the dealer invoice to purchase one. AAA reminds motorists that buying a fuel-efficient vehicle only is a smart financial move if it carries a fair price tag.

Reports for May 17, 2005, reflect the following average prices per gallon for self-serve, regular unleaded gas:

                                      Current        Month Ago     Year Ago
   National                            $2.16           $2.24         $1.97
   Iowa                                $2.04           $2.19         $1.92
   Cedar Rapids                        $2.03           $2.23         $1.90
   Davenport                           $2.06           $2.18         $1.94
   Des Moines                          $2.04           $2.16         $1.90
   Sioux City                          $2.08           $2.18         $1.93
   Waterloo                            $2.01           $2.15         $1.88

AAA's Fuel Gauge Report is based upon data from the Oil Price Information Service, the nation's most comprehensive source of petroleum pricing statistics, and can be found at http://www.fuelgaugereport.com/ .

AAA offers automotive, travel, insurance and financial services to more than 45 million members in the United States and Canada. AAA Minnesota/Iowa is part of The Auto Club Group, with 4.1 million members in eight Midwest states.