After weeks and weeks of dueling stories about whether gas prices will continue to go up ahead of the July 4th holiday, the consensus seems to have settled on consumers paying more at the pump.
According to Gas Buddy, which as late as last week was proclaiming a drop in the highest gas prices drivers have seen in four years, motorists hitting the road to celebrate the July 4 holiday will be shelling out an average of $2.90 per gallon, the highest Independence Day gas prices since 2014, when the national average hit $3.66 per gallon.
“Oil has surged over 10 percent just in time for summer’s busiest travel holiday, costing motorists over $1 billion more than last year,” Patrick DeHaan, a GasBuddy analyst, said in a news release. “All the ingredients exist for the national average to inch closer to $3 per gallon, just in time for the second half of the summer.”
But whether that will cause drivers to curtail or even change their travel plans is altogether another question; and most analysts don’t believe it will. They expect a record-breaking number of Americans to travel by car this holiday, and traffic to be at its worst on Tuesday in the late afternoon.
AAA, which has tracked travel numbers over Fourth of July for the last 18 years, reports that the number of on-the-road travelers will be up 5 percent from 2017. That’s despite gas prices going up an average of 62 cents across the country from a year ago.
Again, we are still pretty far from the 2014 national average and most analysts don’t believe motorists will be jarred into changing their driving habits until the price hits the psychological threshold of $3 per gallon.
They might not have to wait for long. Higher prices are expected to hang around all summer. After five-straight weeks of prices dropping, gas prices are likely to increase again as oil prices surged to $73 per barrel late Thursday, the highest since 2014. The U.S. State Department ordered buyers to curb their oil purchases from Iran by November. In addition, OPEC’s smaller-than-expected oil production increase last week fueled speculation that global inventories will continue to drop, and a government report showed U.S. oil inventories dropped three times as much as expected as total petroleum exports from the U.S. hit a new record high.
President Donald Trump said Saturday that he had received assurances from King Salman of Saudi Arabia that the kingdom will increase oil production, “maybe up to 2,000,000 barrels” in response to turmoil in Iran and Venezuela. Key OPEC member Saudi Arabia acknowledged the call took place, but mentioned no production targets.
Trump wrote on Twitter that he had asked the king in a phone call to boost oil production “to make up the difference…Prices to (sic) high! He has agreed!”
A little over an hour later, the state-run Saudi Press Agency reported on the call, but offered few details.
“During the call, the two leaders stressed the need to make efforts to maintain the stability of oil markets and the growth of the global economy,” the statement said.
It added that there also was an understanding that oil-producing countries would need “to compensate for any potential shortage of supplies.” It did not elaborate.
Well, there you go. We’ll have to see whether the Saudis honor any agreement with the president. And even if they do, whether it will have the desired effect of pushing down gas prices.
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Regardless, even with high gas prices, most motorists aren’t likely to curtail their travel during the most popular summer holiday, due to its appeal and rich tradition celebrating the nation’s birthday.
AAA says that the Fourth of July falling on Wednesday this year has given travelers more flexibility to schedule trips either the weekend before or after the holiday. That could account for the increase is drivers this year.
Are high gas prices having an effect on your travel plans?