As Americans gear up to celebrate the unofficial start of summer, the roads are expected to be bustling with over 37 million travelers during the Memorial Day weekend. While road travel is on the rise, there’s good news for drivers across the country: the cost of gas has significantly dropped compared to last year, resulting in substantial savings.
Decreased Gas Prices:
According to AAA, the national average for regular gasoline currently stands at $3.57 per gallon. Although this represents an increase from the winter lows, it’s still over $1 less than the average price of $4.60 per gallon witnessed on the Friday before Memorial Day last year. As a result, GasBuddy predicts a substantial decline in consumer spending on gasoline during the four-day weekend, estimating savings of approximately $1.6 billion compared to last year.
Factors Influencing Gas Prices:
One of the primary factors contributing to the decline in gas prices is the decrease in oil prices. US oil, currently trading at around $72 per barrel, is 37% cheaper than it was a year ago. Moreover, oil output in both the United States and Russia has remained steady, defying concerns surrounding geopolitical tensions and sanctions. However, it’s essential to note that the decline in gas prices is not entirely positive, as it also reflects concerns about potential recession risks and the impact of the Federal Reserve’s interest rate hikes.
Savings Across the Nation:
This Memorial Day weekend, drivers in all 50 states can enjoy lower gas prices. Significant price reductions have been observed in California ($1.31), Alaska ($1.30), New York ($1.25), New Jersey ($1.24), and Florida ($1.22). While the current gas prices are not historically cheap, they are still far from the record high of $5.02 per gallon seen last June.
Future Outlook:
Patrick De Haan, the head of petroleum analysis at GasBuddy, points out that those who delayed their road trips this summer are now being rewarded with substantial savings on gasoline. Looking ahead, De Haan predicts a lower probability, now at one in three, that the national average for regular gas will reach $4 per gallon this summer, compared to a previous estimate of two in three chances in January. However, potential risks include the impact of Gulf Coast refinery disruptions caused by hurricanes and the possibility of an unexpectedly robust economy resulting in increased fuel demand.
