AAA Makes Predictions for August Gas Prices

AAA released its weekly fuel gauge report last week, showing a sharp increase in gas prices through July and predicting that prices will remain high through Labor Day.

According to AAA numbers, national gas prices increased 5.1 percent, or 17 cents a gallon, over the course of July to close out at $3.50 a gallon. That's the first monthly increase since March and the largest increase for July since at least 2000, when AAA began keeping records.

If it seems like prices had been low this summer, they were. Fuel costs had decreased three months in a row before falling to a summertime low of $3.326 on July 2. However, prices rose quickly to close out the month at the national average of $3.50, $3.66 in the Philadelphia region.

In its most recent report, AAA predicts with "medium-high" confidence that gas prices will remain flat or experience a small increase between now and Labor Day. That would buck a historical trend, as seven of the last 10 Augusts have shown a gas price decrease. Prices almost always fall following Labor Day as the summer driving season ends and refineries transition to less expensive fuel blends.

AAA states that the high prices are due to rising crude and ethanol prices, geopolitical concerns in the Middle East and mixed economic news surrounding the global economy. Factors that could impact prices in August include the global economy, U.S. unemployment data, European debt developments, the Atlantic hurricane season and events in the Middle East, AAA says.