Surprise! Gas prices dropping heading into holiday travel weekend
Although gas prices are at their highest level ever for this time of year, prices at the pump dropped slightly this week as they have for the past few weeks, bringing relief to many who are preparing to take to the roads for the upcoming Thanksgiving holiday weekend. Thenational average for regular grade gasoline dropped 6 cents this week to $3.38 Friday. Prices are 9 cents above month ago prices and 49 cents above year-ago prices, yet 73 cents below the all-time high of $4.11 per gallon set in the summer of 2008.
Crude oil soared above $100 per barrel Wednesday for the first time ever in November (and the first time since early June), yet gas prices are dropping at the pump. Up 30 percent since early October, crude oil jumped on Wednesdayfollowing news of a pipeline reversal in the Midwest that will ease a glut of crude around the Cushing,Oklahoma delivery point. However, concerns for the European economic outlook leading to further demand destruction caused prices to tumble 4 percent Thursday in the biggest one-day percentage loss since September 28, leading many analysts to believe crude will continue to fall in the coming week due to continued euro zone debt concerns. Crude oil rebounded slightly Friday as the euro gained strength against the dollar, a sign the struggling European economy could possible be stabilizing. Although crude crossed the $100 per barrel threshold mid-week, it closed the week at $97.67 per barrel, its worst weekly performance since late September. Might recent crude oil increases drive gas prices higher in coming weeks? Perhaps yes, however, despite increases in the commodity price throughout the past two weeks, gas prices have declined steadily.
The U.S. Energy Information Administration’s (EIA) weekly report showed crude stocks fell by 1.1 million barrels to 337 million barrels. Gasoline stocks rose 1 million barrels to 205.2 million barrels. Gasoline demand continues to be very poor, dropping 46,000 barrels per day (bpd) to 8.625 million bpd, due to high gas prices and a weak economy.
“Despite gas prices at their highest level ever for the month of November, prices at the pumps have leveled off and even dropped slightly this week, which is welcome news to the millions of Americans who will take to the roads in the coming days for the Thanksgiving holiday,” said Windy VanCuren, Public Affairs Specialist for AAA Mid-Atlantic. “Although economic concerns continue to influence financial decisions for many Americans, that’s not stopping many from gassing up to travel to be with family and friends next weekend. What can motorists expect to pay at the pump throughout the holiday season? Analysts believe gas prices will drop slightly through the remainder of the year.”
AAA forecasts 42.5 million Americans will travel 50 miles or more from home during the Thanksgiving holiday weekend, a four percent increase from the 40.9 million people who traveled one year ago. This is the first significant increase in any holiday travel this year.Despite potentially seeing the highest ever retail gas prices at Thanksgiving, approximately 38.2 million people (90 percent of holiday travelers) plan to take to the nation’s roadways this Thanksgiving holiday weekend, a four percent increase compared to 2010 when auto travelers totaled 36.8 million. Automobile travel remains the preferred choice of transportation for holiday travelers as it is often more affordable, convenient and flexible.