Major Surge Is Unlikely for Prices of U.S. Gas

But energy experts say that a major jump is unlikely for the 29.2 million Americans whom AAA expects to travel 50 miles or more on the road this weekend — up from 28 million last year — despite the summer of unrest across the Middle East and North Africa.

In fact, Americans will pay considerably less for gasoline than they did last Labor Day weekend, when refinery shutdowns and Hurricane Isaac, which hit the coast of the Gulf of Mexico, heightened fears of gasoline shortages.

“Gasoline prices are going to be surprisingly temperate,” said Tom Kloza, chief oil analyst at GasBuddy.com. “In California drivers will be spending 30 to 40 cents less than last Labor Day weekend for a gallon of regular and much of the rest of the country will be between 5 and 15 cents lower than last year.”

According to the AAA daily fuel gauge report, the national average price of a gallon of regular gasoline on Friday was just over $3.58, still only 5 cents higher than a week ago and 4 cents cheaper than a month ago. Gasoline prices are just beginning to catch up with the rise in global crude oil prices, which had climbed roughly $6 a barrel in just a few days as the United States and allies prepared to attack Syria in retaliation for what they suspect was a government chemical weapons attack on Syrian civilians.

Oil prices retreated by about $2 a barrel on Thursday and slumped a bit more on Friday. Experts said prices could easily jump back up after an expected attack on Syria.

Oil experts say gasoline prices could rise as much as 10 cents a gallon over the next week or two, as higher oil prices gradually push up wholesale and retail prices. But few expect a big, lasting jump unless there is a major expansion of conflict across the Middle East that seriously threatens oil production and shipments.

The Energy Information Administration projects that the national average price for a regular gallon of gasoline will be $3.59 during the third quarter and $3.52 for the entire year, 11 cents below the average 2012 price. It expects an even lower 2014 annual price of $3.37 a gallon.

“Gas prices are probably going to be spiking over the next few days,” said Michael Green, a spokesman for AAA. But he added: “It’s not horrendous. We’re looking at the lowest Labor Day gas prices since 2010.”

One reason, according to a report by the Energy Department on Wednesday, is a surprise weekly jump of three million barrels in national oil inventories. The report also showed a much lower-than-expected drop in inventories of gasoline, which remained particularly well supplied on the heavily populated East Coast. Several East Coast refineries that curtailed operations last week for unplanned maintenance are expected to be back up in the next few days, which should further increase supplies.

Summer driving normally tapers off after the Labor Day weekend, and that should help keep a lid on prices. Demand for gasoline should drop by about 15 million gallons a day in September from August levels, according to government statistics.

Most important, the country is better prepared for any shocks if the instability in the Middle East and North Africa escalates much further. United States gasoline inventories are up nearly 10 percent from a year ago, while demand is up by only about 1 percent.

Mostly because of a frenzy of shale drilling and expansion of oil sands production, the United States and Canada are producing two million barrels of oil a day more than when the turmoil in the Middle East and North Africa broke out two years ago. That, along with the decline in consumption since 2007, has meant that the Strategic Petroleum Reserve and other inventories now have the capacity to replace about nine months of imports, about 40 percent more than only five years ago.

Bits Blog: H.P.’s Chief Says a Revival Is Unlikely Before 2016

Peter DaSilva for The New York Times Hewlett-Packard needs four more years “to have confidence in itself,” says Meg Whitman, the company’s chief executive.

7:45 p.m. | Updated

SAN FRANCISCO — Meg Whitman, Hewlett-Packard’s chief executive, beat up her company on Wednesday.

Ms. Whitman told a meeting of Wall Street analysts that they should expect sharply lower revenue and profits. She also told them not to expect the company to fully right itself before 2016. “We have much more work to do,” she said.

While the news was not completely unexpected, the vehemence of Ms. Whitman’s message drove shareholders to the exits. H.P.’s stock dropped about 8 percent while she was speaking and ended the day at $14.91 a share, down nearly 13 percent on unusually high trading volume. The stock had not been that low in a decade.

The drubbing was probably what Ms. Whitman, the former chief  of eBay, had in mind. Executives involved in her presentation, who requested anonymity because they were not authorized to speak publicly, said she wanted to get as much bad news as possible out at once, so the company could focus on rebuilding rather than having to explain one disappointing quarter after another.

Analysts, while somewhat taken aback by the depth of H.P.’s problems, thought Ms. Whitman had made the right move in putting them out in the open. “In an era where C.E.O.’s watch every word they say, it’s refreshing to see complete candor. H.P. is a mess,” said Patrick Moorhead, president of Moor Insights and Strategy, who attended the meeting. “It will take five to 10 years to fully take care of this, just the way it took I.B.M. to remake itself. Wall Street doesn’t like anything longer than a one- to three-year horizon. It’s too much risk for them.”

For now, Hewlett-Packard is still the world’s leader in sales of personal computers, printers and computer servers, with revenue last year of $127 billion, but it forecast revenue next year of 11 percent to 13 percent below fiscal 2012 levels. Analysts had assumed it would only decrease about 1 percent.

Operating profit margins, which have been about 7 percent, could evaporate completely or, at best, shrink to about 3 percent, the company said. Earnings per share were expected to fall by about 16 percent from what analysts had projected.

The meeting was probably also Ms. Whitman’s last chance to blame previous leaders for any of H.P.’s problems. Since 1999, H.P. has had three other chief executives, each with a different vision and operating strategy. All left under duress, leaving a company that leads the industry in revenue but is internally chaotic.

Those problems now belong to Ms. Whitman, who took over almost 13 months ago. She has replaced a number of top executives, and has initiated changes to product development and the company’s global marketing and branding. These changes will start to appear next year, but she is clearly impatient to fix more things faster.

“Operational excellence should have become a way of life,” she told analysts, but instead, H.P. is hampered by poor internal communications and management systems.

“I’ve learned at H.P. that you do not get what you expect, you get what you inspect,” she said.

Investors may also have been troubled by some of Ms. Whitman’s strategy. She intends to shrink the number of products H.P. makes, and to move out of businesses that are in decline.

For example, she said the company made more than 2,100 varieties of laser printers, causing excess costs in everything from parts to packaging requirements.

Printer cartridges were once responsible for over 90 percent of H.P.’s profits, but they face increasing competition from lower-price suppliers. Consumers are also using their printers less because many of the things they used to print routinely, like maps and boarding passes, are on smartphones.

H.P. is reversing its printer strategy in the developing world by selling cheaper cartridges and more expensive printers. In developed economies like the United States, it wants to move to a subscription model in which business customers pay an annual fee, and their Internet-connected printers get new cartridges when the system detects they are low on ink.

Investors could be skittish about plans like these, simply because they are not yet proved. Indeed, H.P. shares fell further as Ms. Whitman’s lieutenants laid out the new strategies.

In other areas, there are questions about whether H.P.’s new products can replace, or even surpass, the revenue lost from declining businesses. Cloud computing systems, which consist of thousands of servers sold as a unit, are meant for an increasingly important market. Cloud computing is more efficient than existing systems, however, which means it is likely to lower the overall demand for large numbers of servers.

For all the difficulties she identified, Ms. Whitman may have actually cloaked other long-term problems. The new company she foresees, which she projected would exist by 2016 or so, would probably increase revenue no faster than the overall growth of the global economy. Profit margins would improve from better management, but not necessarily from technological innovations.

The new H.P. would most likely employ fewer workers, as well. Ms. Whitman has already announced a total of 29,000 layoffs. The company had 349,600 employees at the end of last October. She said future profitability would depend in part on more automation, indicating even more job cuts.

While Ms. Whitman said H.P. must focus more closely on its top 14 markets and its main  competitors, a continued low stock price may present other worries. The tech industry is facing a transition from traditional PCs and servers to mobile devices and cloud computing, and is consolidating. H.P. could become a target either for corporate raiders or for another tech company in a hostile takeover.

Payroll Tax Cut Unlikely to Survive Into Next Year

That is when the temporary payroll tax holiday ends. Its expiration means less income in families’ pocketbooks — the tax increase would be about $95 billion in 2013 alone — at a time when the economy is little better than it was when the White House reached a deal on the tax break last year.

Independent analysts say that the expiration of the tax cut could shave as much as a percentage point off economic output in 2013, and cost the economy as many as one million jobs. That is because the typical American family had $1,000 in additional income from the lower tax.

But there is still little desire to make an extension part of the negotiations that are under way to avert the huge tax increases and across-the-board spending cuts, known as the fiscal cliff, that will start in January without a deal. For example, without any action, the Bush-era tax cuts will expire and the military and other domestic spending programs will be reduced.

“This has to be a temporary tax cut,” said Timothy F. Geithner, the Treasury secretary, testifying before the Senate Budget Committee this year and voicing the view of many in the White House and on Capitol Hill. “I don’t see any reason to consider supporting its extension.”

The White House has not pushed for an extension. “We’ll evaluate the question of whether we need to extend it at the end of the year when we’re looking at a whole range of issues,” Jay Carney, the White House press secretary, told reporters last month.

The original point of the payroll tax holiday was to stimulate consumer spending and aid middle-income households. But now Congress needs the money as it struggles with vast deficits and believes the economy can withstand the expiration.

Many Republicans vehemently opposed its passage last year, as it would divert money from the Social Security program. Many Democrats fervently supported it last year but show no such enthusiasm now. Nancy Pelosi of California, the top House Democrat, has told reporters she thinks it should expire.

Support is lacking for two main reasons. First, both Democrats and Republicans would rather focus on the broader political and economic issue of the fate of the Bush-era income tax cuts. These cuts, too, were initially meant to be temporary, but are now deeply entrenched in the tax code and central to the budget battle.

Second, though the economy has not become significantly stronger over the past year and the tax increases in addition to spending cuts coming next year could push the country into a recession, independent economists say that the economy could shoulder the payroll tax increase without undue harm.

Moody’s Analytics, for instance, estimates that expiration of the payroll tax holiday would shave 0.6 percentage point off economic growth, adjusted for inflation, in 2013 — and that the economy could safely stomach government spending cuts and tax increases totaling up to 1.5 percentage points of economic output.

Still, expiration of the payroll tax cut will increase the taxes of millions of middle-class families.

The fragile state of the recovery and the frustratingly slow growth of the economy have heightened the stakes for the end-of-year negotiations. Economists estimate that if Congress fails to forestall or unwind the spending cuts and tax increases due to take effect next year, the hit could send country back into a recession.

The Federal Reserve currently estimates that the economy will grow 2.5 to 3 percent next year, and that the unemployment rate will be 7.6 to 7.9 percent, still painfully high.

The uncertainty in the United States is “currently a threat,” said Christine Lagarde, the managing director of the International Monetary Fund, pressing Congress last week to avoid the cliff. “It’s not a threat just for the United States of America. It’s a threat for the global economy.”

Some economists have pushed for an extension of the payroll tax holiday to help support the recovery — or for its replacement with other measures to help the millions of low-income working families whose taxes will rise when it expires.

The Economic Policy Institute, a liberal Washington-based research group, for instance, has said that the payroll tax cut has a stronger stimulative effect on the economy than many other tax cuts because the working households that receive it tend to spend the money rather than save it. Thus, it estimates that the tax cut’s expiration could erase 0.9 percent of economic output and put up to a million jobs at risk.

It recommends replacing the payroll tax cut with infrastructure spending or fiscal aid to states, as a form of support for the recovery in the short term that would not have harmful long-term budget effects.

Some conservative economists have pressed for its extension as well, arguing that no Americans should have their taxes go up next year.

“Obama and Congress both need to hear this alarm clock, wake up, and get busy avoiding a payroll tax hike insult to the middle class’s injuries of stagnant wages and high unemployment,” wrote J. D. Foster, a fiscal specialist at the right-of-center Heritage Foundation.

The payroll tax holiday this year has reduced workers’ tax on wages up to $110,100 to 4.2 percent from 6.2 percent. In 2012 that translated into a $700 tax cut for a person making $35,000 a year and a $2,202 tax cut for workers making $110,100 and up.

Last winter, the White House pushed a resistant Congress hard for an extension, arguing it was needed to support the flagging recovery. The White House set up a campaign for Americans to send in stories about what they would do with the extra $40 in their paychecks, and denounced Republicans as not wanting to aid the middle class.

“For the typical American family, it is a big deal. It means $40 extra in their paycheck. And that $40 helps to pay the rent, the groceries, the rising cost of gas,” President Obama said, standing with some of the families who had sent in stories.

The other provisions at stake in the fiscal cliff negotiations overshadow the payroll tax cut.

The Congressional Budget Office has calculated that according to current law, the federal deficit would fall by more than half a trillion dollars from the 2012 fiscal year to the 2013 fiscal year. The expiration of the Bush tax cuts and other provisions would reduce the deficit by $221 billion.