July 20 — Weaker overall summer driving demand, combined with a lack of speculative buying following a recent sell-off, have continued to erode gasoline prices. Prices are nearly half of what they were last summer but most consumers continue to spend conservatively. This has affected overall energy prices and taken a significant toll on industries that typically benefit from summer travel.

Overall buying by traders looking to step into the market is down due to uncertainty of the potential for higher prices. The continued weak economy and lackluster consumer buying patterns are adding fuel to the downward moving market. Gasoline prices have fallen 20 cents to 30 cents over the past month.

Ethanol prices have weakened significantly through the first half of summer as the combination of lower gasoline prices and weaker corn prices have created a downward push on overall markets. Although prices slipped significantly from mid-June to mid-July, plants' profitability levels have improved due to lower corn costs. Ethanol prices are trading at a significant discount to the gasoline markets, which is boosting demand by stimulating additional blending activity in many parts of the country. Trade activity has remained light in the ethanol market with overall futures markets moving in a relatively narrow range over the past couple of weeks. However, pressure is expected to increase as overall energy usage is expected to remain light through the remainder of the summer.