The national average price for regular unleaded gasoline dropped eight cents this week to $3.51 per gallon Friday. This is 11 cents lower than month ago prices, yet 14 cents more than year ago prices. The national average has now declined for 16 straight days (through Friday).
Yet while gas prices are higher this year than the same time last year leading up to the Independence Day holiday, prices have dropped significantly since reaching a 2013 peak price of $3.79 per gallon on Feb. 27. This spring Tom Kloza, chief oil analyst for OPIS and AAA gas price partner, noted that whatever motorists pay on St. Patrick’s Day ($3.69 per gallon national average) will be considerably more than what they will pay on July Fourth or Labor Day. As of June 28, motorists were paying $3.51, 18 cents less than on St. Patrick’s Day.
Crude oil moved upward throughout the week, posting significant gains in four straight sessions through Thursday that took the commodity over the $97 per barrel mark. A drop in unemployment claims and an increase in consumer spending were looked at as signs that the economy is improving. In addition, oil prices rose in reaction to Wednesday’s assurance by Federal Reserve officials that the U.S. central bank was in no rush to scale back its massive bond-buying program. A more pertinent factor supporting crude oil, though, have been issues in Canada, from flooding earlier in the week forcing pipelines to slow down to news today that Kinder Morgan has shut down its TransMountain Pipeline after it discovered contaminated soil while doing scheduled maintenance on the line. The spate of issues with moving Canadian crude oil this week has been a strong supporter of crude oil prices. Crude oil settled at $96.56 Friday, up three percent on the week.
In its weekly report, the Energy Information Administration (EIA) data showed crude oil stocks remained relatively flat, rising 18,000 barrels to 394.1 million barrels. Gasoline stockpiles rose 3.7 million barrels to 325.4 million barrels. Gasoline demand actually increased by 54,000 barrels per day (bpd) to 8.894-million bpd.
“Prices at the pump continue to decline, which is welcome news for vacationers and day-trippers ready to ramp up summer travel,” said Martha M. Meade, Manager of Public and Government Affairs for AAA Mid-Atlantic. “Those traveling for the Independence Day holiday this week should see stable prices, however AAA cautions that gas prices could rise into July as summer travel heats up. A seasonal uptick would not be unusual, as prices have increased double-digits during the month of July the past two years.”
AAA Travel projects 40.8 million Americans will journey 50 miles or more from home during the Independence Day holiday, a 0.8 percent decrease from the 41.1 million people who traveled last year. Approximately 34.4 million people (84 percent) plan to drive to their destination, a decrease of 0.7 percent from the 34.7 million who drove last year. In terms of gas prices, prices fell through the end of June and prices at the pump could turn higher in July (as has been the case in recent years) as the summer driving season ramps up. The national average rose 17 cents per gallon in July 2011 and 16 cents in July 2012.
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Chris Graham
