Title: Fourth of July Travelers Benefit from Lower Gas Prices
Subtitle: Record Number of Americans Expected to Travel by Car Despite High Inflation
Date: [Current Date]
[City Name] – This Fourth of July weekend, American roads will be bustling with a record-setting number of travelers, but there’s good news for those hitting the highways – gas prices are significantly cheaper compared to last year. According to AAA, an estimated 43.2 million Americans are anticipated to travel by car this holiday weekend, marking a 2.4% increase from the previous year.
Gasoline prices across the nation have experienced a substantial dip, providing relief to motorists. The national average for regular gasoline dropped to $3.55 a gallon on Thursday, with Utah having the highest average at $3.96 a gallon. In stark contrast, last year saw an average of $4.87 per gallon. This nearly unprecedented decrease in gas prices has proven to be a boon for consumers.
The U.S. Energy Information Administration reports that during the week ending June 26, the average gas price was $3.57 a gallon, marking a $1.30 decline, or a 27% drop, compared to the same period last year. John LaForge, the leader of real asset strategy for the Wells Fargo Investment Institute, highlights that this is the second-largest one-year price drop in the week leading up to the Fourth of July in the past 33 years. The only year with a more significant drop was 2008-2009, during the Great Recession.
Patrick De Haan, head of petroleum analysis at GasBuddy, states, “This is terrific. Gasoline prices are a leading economic indicator for many Americans.” The average driver is now spending $20 less per fill-up compared to last year.
Despite the decrease in pump prices, it is important to note that gas prices were even cheaper in the summer of 2020 due to the economic impacts of COVID-19. However, this year’s price drop has been significant and widespread, with all 50 states experiencing a decline.
AAA reports that Indiana has seen the most dramatic decrease in gas prices, with a drop of $1.58 per gallon over the past year. Other states such as Ohio, California, and Illinois have also witnessed notable declines of $1.48, $1.47, and $1.47 per gallon, respectively. On the other hand, Washington State has experienced the smallest decline of just 50 cents per gallon. Despite the relief at the pump, consumers are facing increased costs elsewhere, such as groceries, car purchases, and rent.
High inflation rates contribute to Patrick De Haan’s prediction that gasoline demand over the Fourth of July weekend will be 5% to 10% lower than 2019 levels, despite a 4% increase in the number of people driving compared to that year.
The decrease in gas prices can be attributed to multiple factors. Lower oil prices due to concerns about the Federal Reserve’s interest rate hikes slowing the economy into a recession play a significant role. Additionally, Russia’s oil exports have remained unaffected by the war in Ukraine or Western sanctions, alleviating concerns of supply disruptions. However, Wells Fargo’s John LaForge predicts that the oil market will gradually tighten and push prices higher in the coming year, with potential volatility stemming from the ongoing situation in Russia.
While the oil market has thus far disregarded the unrest in Russia, GasBuddy’s Patrick De Haan acknowledges the country as a source of risk for gas prices, emphasizing that the situation remains unpredictable and could impact oil prices.
As the Fourth of July weekend approaches, travelers can take advantage of the lowest gas prices in years, offering some financial relief during a time of increased travel expenses and high inflation rates.