As the summer driving season winds down, so are prices at the pump. The average U.S. retail price for regular gasoline dropped 2 cents for the second consecutive week to $2.61 a gallon Friday. The current price is $1.05 below year-ago prices and $1.50 below the record price of $4.11 set last July. Throughout most of the summer, gasoline prices have remained between $2.40 a gallon (Memorial Day weekend) and about $2.70 a gallon.
Crude oil had its ups and downs this week. After beginning the week close to $75 a barrel, oil prices dipped as low as $69.83 on Wednesday before rebounding later in the week to settle at $72.74 on Friday. Prices were boosted by better-than-expected U.S. GDP and jobs data that signal economic recovery is on track. As evident this week, analysts expect crude oil prices to hold in the $70 to $75 range for some time to come.
The weekly Energy Information Administration (EIA) report showed U.S. crude inventories rose 200,000 barrels to 343.8 million barrels, against a forecast for a 1.1 million barrel drop. U.S. gasoline supplies fell 1.7 million barrels to 208.1 million barrels, above the forecast for a 1.0 million barrel drop. Also this week, the American Petroleum Institute’s (API) inventory report showed crude stocks rose 4.3 million barrels to 346.7 million barrels and gasoline stocks dropped 1.8 million barrels to 209.7 million barrels.
Hurricane season continues. This week Tropical Storm Danny weakened in the Atlantic Ocean and was downgraded to Tropical Depression Danny on Saturday. Although it continued to edge closer to the U.S. east coast, forecasts showed Danny’s track turning away from Gulf Coast oil and gas production facilities and traveling up off the U.S. east coast, potentially targeting Canada’s Atlantic provinces by the end of the weekend.
“Although many Americans are looking ahead to the upcoming Labor Day holiday weekend for their last leisure trips of the summer, AAA is projecting a 13 percent decrease in Labor Day weekend travel this year due to the weakened economy and a late holiday,” said Martha M. Meade, manager of public and government affairs for AAA Mid-Atlantic. “Yet despite the projected drop in travel, motorists looking to get away one last time this summer should enjoy stability at the gas pumps through the holiday weekend.”
The official summer driving season will come to an end with the upcoming Labor Day weekend and AAA is projecting less holiday traffic than in previous years. U.S. travel during the Labor Day weekend is expected to fall 13% from last year. AAA is projecting 39.1 million travelers are expected to travel 50 miles or more away from home this year, a drop from 45.1 million last year. A weakened economy and the fact that the Labor Day holiday falls later than usual this year (many children have already returned to school) are the contributing factors to the projected decrease in travel. Despite the projected drop in travel, this year’s holiday is expected to be the third-busiest Labor Day this decade and more Americans are expected to travel this weekend than over this year’s Fourth of July weekend.
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