Top line
Drivers traveling during the Fourth of July holiday can breathe a sigh of relief at the pump, as the national average price of a gallon of gasoline is expected to remain below $3.50, according to a report released Tuesday, as more than 60 million Americans are expected to hit the road for the holiday.
More than 60 million Americans are expected to travel during the week of July 4.
Highlights
The national average price for a gallon of regular gasoline hit $3.50 on Tuesday, according to AAA and GasBuddy, though that price is expected to drop to $3.49 per gallon by Thursday, which would make it the lowest Independence Day price since 2021, according to GasBuddy.
That price puts it just four cents below last year’s price on July 4, and significantly below the price paid by motorists at the same time in 2022 ($4.79), just a month away from the highest gasoline price recorded in the United States — a record high analysts attributed largely to Russia’s invasion of Ukraine a few months earlier (AAA estimates that the cost of oil makes up 54% of the price motorists pay at the pump).
GasBuddy predicts that 45% of Americans will hit the road for the July 4 weekend, while AAA estimates that 60 million Americans will drive more than 50 miles during the week of July 4 — the most AAA has predicted for July 4, and a possible indicator that gas demand could soon increase, AAA spokesman Andrew Gross said.
According to the Energy Information Administration, gas demand fell from 9.39 million to 8.97 million barrels per day in the week ending June 21, down about 240,000 barrels from a year earlier.
Although AAA says weak demand has helped cool gasoline prices, they could rebound as gasoline demand increases over the summer and if oil prices continue their upward trend (West Texas Intermediate jumped to $82.95, a three-month high, while Brent climbed to $86.37 a gallon, its highest point since early May).
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Contra
U.S. gasoline prices have remained broadly stable in recent months, hitting a six-month high of $3.60 in April before falling to $3.50 in early June and $3.40 a week later. But analysts predict prices will rebound in the coming weeks. Patrick De Haan, an oil analyst at GasBuddy, warned that a busy hurricane season could push prices higher, especially if those storms impact refineries, which turn oil into gasoline (about 15% of U.S. crude oil production and 47% of oil refining capacity come from the Gulf of Mexico, according to the EIA).
Tangent
Gasoline prices are cheapest in the South and Great Plains, led by Mississippi ($2.96), Louisiana ($3.03), Arkansas ($3.06), Oklahoma ($3.08), Texas ($3.10) and Tennessee ($3.10). Prices are highest in California, at $4.79, due to high state taxes, transportation and the shift to a more expensive summer fuel blend. They are followed by Hawaii ($4.70), Washington ($4.31), Oregon ($4.05), Nevada ($4.04), Alaska ($3.90) and Illinois ($3.83).
Further reading
