Fourth of July gas prices highest in six years

AAA-LogoAlthough the national average price of gas has remained relatively steady as we approach the Fourth of July holiday, prices at the pump remain at a six-year high for this time of year.

The national average price for regular unleaded gasoline dropped to $3.67 per gallon Thursday, down a penny since the same day last week, even with one month ago, and 19 cents more per gallon than a year ago.  Independence Day gas prices have not been this high since prices topped $4per gallon in July 2008.  In comparison to previous Independence Day holidays, motorists will face prices that are the highest since 2008, with today’s average ($3.67) surpassing the holiday’s price per gallon from: 2013 ($3.48); 2012 ($3.34); 2011 ($3.57); 2010 ($2.74); and 2009 ($2.62).

AAA Travel projects 41 million Americans will journey 50 miles or more from home during the Independence Day holiday weekend, a 1.9 percent increase from the 40.3 million people who traveled last year and a nearly 14 percent increase compared to the Memorial Day holiday weekend.  Automobile travel is projected to be at its highest level since 2007, with more than eight in 10 (34.8 million) celebrating their freedom with a road trip.  The Independence Day holiday travel period is defined as Wednesday, July 2 to Sunday, July 6.

After topping $107 per barrel two weeks ago, crude oil prices have moved closer to the $104 mark (the lowest close in nearly three weeks) on signs the situation in Iraq (OPEC’s second largest producer) has somewhat stabilized.  After capturing Mosul, Iraq’s second largest city, it was rumored that ISIL (Islamic State of Iraq and the Levant) would enter Baghdad or the country’s southern oil producing region. These concerns caused global prices to rise, but many analysts now see this action as unlikely in the near term barring a major offensive move by ISIL.  Crude oil settled at $104.48 Wednesday, down nearly two percent since the same day last week.

In its weekly report, the Energy Information Administration (EIA) noted that U.S. crude oil stocks dropped 3.2 million barrels to 384.9 million barrels.  Gasoline stocks dropped 1.2 million barrels to 213.7 million barrels.  Gasoline demand rose 355,000 barrels per day (bpd) to 9.1698 million bpd last week ahead of the July Fourth holiday weekend, though falls short of a year ago and the current four-week average is just slightly ahead of the same four weeks in 2013.

“It is shaping up to be a hot and expensive summer for gas prices, and we have not even hit the busiest time of the year yet,” said Martha M. Meade, Manager of Public and Government Affairs for AAA Mid-Atlantic.  “It is clear that most drivers will pay high prices as they fill up for their summer road trips.  Most drivers are paying about 15-20 cents more per gallon than expected heading into the busy Independence Day weekend due to market fear about Iraq.  It is frustrating that events overseas will make it more expensive to celebrate Fourth of July here at home.”

Gas prices this July likely will remain expensive due to high crude oil costs and rising summertime demand.  AAA expects the national average price of gas in July will range from $3.60-$3.70 per gallon, though prices could climb higher if there are new developments in Iraq or a major hurricane.  Last year gas prices averaged $3.58 per gallon nationally in July.  Prices at the pump have increased by an average of 16 cents per gallon in July during the previous three years as strong summer demand pushed up prices. July is typically the second busiest month of the year on the roads behind August. Last year Americans drove a total of 263.2 billion miles in July.  The most expensive summer driving period was in 2008 when prices averaged $3.95 per gallon. Gas prices have averaged $3.67 per gallon so far this summer.

 

CURRENT AND PAST GAS PRICE AVERAGES

Regular Unleaded Gasoline (*indicates record high)

 

 7/3/14Week AgoYear Ago
National$3.67$3.68$3.48
Virginia$3.47$3.49$3.34
Charlottesville$3.37$3.38$3.29
Norfolk Area$3.55$3.57$3.35
Richmond$3.44$3.45$3.31
Roanoke$3.34$3.36$3.27
Crude Oil$104.48 per barrel (at Wednesday’s close)$105.84 per barrel (6/26/14)$101.24 per barrel

(7/3/13)

 

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