At $2.86, gas prices are at their highest point for an Independence Day holiday in four years. However, for the nearly 40 million motorists expected to travel this week, they will find prices at the pump 11-cents cheaper than this past Memorial Day holiday.
“The national gas price average has held fairly steady for the past 10 days, suggesting that U.S. demand is keeping pace with supply and stabilizing summer gas prices,” said Jeanette Casselano, AAA spokesperson. “However, elevated crude oil prices and other geopolitical concerns could tilt gas prices more expensive in the early fall despite an expected increase in global crude production from OPEC and its partners.”
AAA is tracking the following factors that will continue to impact pump prices through the fall:
- Domestic crude inventories: For the first summer driving season in five years, the U.S. has seen the largest one-week reduction (9.9 million bbl) in crude inventories. A consistent decline in supplies could spark higher gas prices.
- Crude production and exports: Refinery runs are at an all-time high and exports are at record levels, which impacts supply levels.
- Gasoline demand: The latest Energy Information Administration (EIA) data shows U.S. demand at 9.7 million b/d, one of the highest levels of the year, and could hit a new record with Independence Day holiday travel.
- Crude oil prices: Last week, crude oil hit $74/bbl – its highest level since 2014.
- Geopolitical concerns: Market observers are watching crude production levels in Libya and Venezuela amid economic woes in Venezuela, and details on the Iran sanctions all of which are influencing market prices.
“If U.S. demand remains strong, domestic and global supply decline and crude inventories continues to sell over $70/bbl, motorists may see the national gas prices average to potentially jump back up to nearly $3/gallon in coming months,” added Casselano.
- The nation’s top 10 least expensive markets are: South Carolina ($2.53), Alabama ($2.53), Mississippi ($2.53), Louisiana ($2.57), Arkansas ($2.58), Oklahoma ($2.59), Tennessee ($2.60), Virginia ($2.60), Missouri ($2.60) and Texas ($2.64).
- The nation’s top 10 largest monthly decreases are: Delaware (-18 cents), Illinois (-16 cents), Indiana (-16 cents), Florida (-15 cents), Virginia (-15 cents), Maryland (-14 cents), Texas (-14 cents), Georgia (-13 cents), Iowa (-13 cents) and Nebraska (-13 cents).
Gas prices in the South and Southeast are seeing volatility on the week with Florida, Oklahoma and South Carolina seeing gas prices increase by three cents while New Mexico, Arkansas and Texas saw prices drop by two cents. All other states are seeing pump prices decline by a penny or remain stable from last Monday. South Carolina ($2.53) has the cheapest gas in the country and the region followed by: Alabama ($2.53), Mississippi ($2.53), Louisiana ($2.57), Arkansas ($2.58) and Oklahoma ($2.59).
Most motorist’s wallets in the region are feeling relief at the pump not just on the week, but on the month with gas price averages double-digits cheaper than just this past June: Florida (-15 cents), Texas (-14 cents), Georgia (-13 cents), Alabama (-12 cents), Mississippi (-12 cents) and South Carolina (-10 cents).
Gasoline inventories continue to register above 83 million despite of an EIA reported decline of 478,000 bbl contributing to the small changes in price at the pump. Overall, inventories are a healthy 784,000 bbl ahead of levels reported this time last year.