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Gas prices have probably peaked, expert says

If your Memorial Day weekend plans have you road tripping, you’ll be paying a little less at the pump this year.

Motorists are paying an average of $2.84 a gallon nationwide, according to AAA. That’s about 10 cents cheaper than last Memorial Day and two-cents less than a month ago.

Nearly 43 million Americans will be traveling over the 3-day weekend, according to AAA, making this the busiest holiday travel season since 2005. A whopping 37.6 million of them will be traveling by car.

“The economy is zooming along, people have jobs and they’re optimistic about the economy,” AAA spokesman Robert Sinclair tells Yahoo Finance’s “The First Trade.” “And when we’ve got extra money in our pocket, it seems we like to dispose of that income with a vacation.”

Sinclair says gas prices have probably already peaked and expects prices to stabilize through the summer.

Traffic is seen on the Interstate 15 in the Cajon Pass, on Wednesday, May 15, 2019, near Hesperia, Calif. The Auto Club is reporting the the upcoming Memorial Day weekend may break another record for southern California travelers on the Interstates. (James Quigg/The Daily Press via AP)

“We’re seeing prices nationally and regionally are the same or slightly less than a week or a month ago, so we could have peaked,” he said. “We should see prices come down from here, especially if crude oil stays around $58 a barrel.”

Crude (CL=F) is the main ingredient in gasoline, so it’s price often determines the direction of pump prices. This week crude prices plunged nearly 8% as the ongoing U.S.-China trade war raises concerns about economic growth and fuel demand.

But when does the price of gas start to impact people’s buying habits or decisions to take a road trip?

“The $3 range is probably the new $4 for a lot of people,” says Sinclair.

A recent AAA survey found the vast majority of Americans would change their driving habits or lifestyle to offset higher gas prices. 25% would start making changes at $2.75 a gallon, while 40% say $3 is their tipping point.

The survey found 79% of Americans would combine errands or trips to save on gas, 73% would drive less, while 61% of respondents said they would reduce shopping or dining out to save on filling-up their gas tank.

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Alexis Christoforous co-anchor of Yahoo Finance’s “The First Trade.” Follow her on Twitter @AlexisTVNews.

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