Just in time for this week’s start to the busy holiday travel season, motorists across the country are finally feeling some relief at the gas pump.
The national average price of regular grade gasoline dropped a penny this week to $3.65 Friday. This is the same as month ago prices and five cents higher than a year ago. Prices remain higher than last year; however, the year-over-year gap has closed to its narrowest margin in more than a month and the national average remains below the price for the same date in 2011 ($3.96) and 2012 ($3.73).
“Gasoline prices have been declining since the beginning of the month, which is typical for this time of year, following the conclusion of refinery maintenance leading up to the May 1 deadline to begin producing summer-blend fuel,” said Martha M. Meade, Manager of Public and Government Affairs for AAA Mid-Atlantic. “AAA expects lower gas prices by Memorial Day weekend. Holiday gas prices should be similar to, or even slightly less than, last year’s national Memorial Day average of $3.63 per gallon, though unexpected developments such as refinery problems or international events could result in higher costs.
Crude oil moved above the $100 per barrel mark this week, after settling below the benchmark the previous week. Political tensions between Russia and Ukraine have kept oil prices elevated (topping $102 per barrel Wednesday) and following a recent vote in eastern Ukraine that yielded reported support for the separatist movement, market analysts suggest it is unlikely that the tensions will ease in the near future. Crude oil settled at $102.02 Friday, an increase of two percent on the week. Including Friday’s settlement, crude oil has now registered 49 settlements above $100 in 2014 and 45 settlements below.
In its weekly report, the Energy Information Administration noted that U.S. crude oil stocks grew by 900,000 barrels to 398.5 million barrels as inventories inch closer to 400 million barrels. Gasoline inventories dropped 800,000 barrels to 212.4 million barrels. Gasoline demand checked in at 9.2 million barrels per day (bpd), notching a high for the year and marking the second time demand was better than 9 million bpd. For some perspective, gasoline demand did not top 9 million bpd in 2013 until late June.
AAA projects 36.1 million Americans will journey 50 miles or more from home during Memorial Day weekend, a 1.5 percent increase from the 35.5 million people who traveled last year, a new post-recession high. Kicking off the summer driving season, more than eight in ten (88 percent) travelers will be driving to their destinations. AAA expects that most drivers will pay lower gas prices by Memorial Day weekend due to rising supplies. The auto club anticipates holiday gas prices to be relatively similar or even slightly less than last year’s national Memorial Day average of $3.63 per gallon, though unexpected developments such as refinery problems or international events could result in higher costs. With many plans already made and budgets set, it is unlikely that gas prices will have a significant effect on travel plans compared to a year ago.
CURRENT AND PAST GAS PRICE AVERAGES
Regular Unleaded Gasoline (*indicates record high)
| 5/18/14 | Week Ago | Year Ago | |
| National | $3.65 | $3.65 | $3.64 |
| Virginia | $3.46 | $3.47 | $3.38 |
| Charlottesville | $3.40 | $3.44 | $3.25 |
| Norfolk Area | $3.51 | $3.52 | $3.39 |
| Richmond | $3.38 | $3.41 | $3.39 |
| Roanoke | $3.38 | $3.40 | $3.27 |
| Crude Oil | $102.02 per barrel (at Friday’s close) | $99.99 per barrel (5/9/14) | $95.16 per barrel
(5/16/13)
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