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July 4 Gas Price Hits Three-Year Low Ahead Of Expected Record Travel

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July 4 Gas Price Hits Three-Year Low Ahead Of Expected Record Travel

Topline

Drivers traveling over the July 4 holiday can take a minor sigh of relief at the pump with the national average price for a gallon of gasoline 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.

Key Facts

The national average price for a gallon of regular gas hit $3.50 on Tuesday, according to AAA and GasBuddy, though that price is expected to dip to $3.49 per gallon by Thursday, making 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 drivers paid at the same time in 2022 ($4.79), just one month off the most expensive gas price recorded in the U.S.—analysts attributed that record in large part to Russia’s invasion of Ukraine months earlier (AAA estimates the cost of oil accounts for 54% of the price drivers pay at the pump).

GasBuddy predicts 45% of Americans will hit the road for the July 4 weekend, while AAA estimates 60 million Americans will travel over 50 miles during the week of July 4—the most AAA has projected for July 4, and a possible indicator gas demand could soon increase, AAA spokesperson Andrew Gross said.

Gas demand fell from 9.39 million to 8.97 million barrels per day in the week ending June 21, according to the Energy Information Administration, putting it down roughly 240,000 barrels year over year.

While AAA says low demand has helped cool gas prices, those prices could bounce back as gasoline demand increases over the summer and if oil prices continue on their upward trend (the West Texas Intermediate jumped to $82.95, a three-month high, while the Brent Crude spiked to $86.37 per gallon, its highest point since early May).

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Contra

Gas prices in the U.S. have remained largely stable in recent months, rising to a six-month high of $3.60 in April, before cooling to $3.50 in early June and to $3.40 one week later. But analysts predict prices will tick back up in the weeks ahead. GasBuddy petroleum analyst Patrick De Haan warned a busy hurricane season could cause prices to swell, especially if those storms impact refineries, which convert oil into gasoline (roughly 15% of U.S. crude oil production and 47% of U.S. petroleum refining capacity comes from the Gulf of Mexico, according to the EIA).

Tangent

Gas 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 a whopping $4.79, the result of high state taxes, transportation and the transition to a more expensive summer fuel blend. Following California are Hawaii ($4.70), Washington ($4.31), Oregon ($4.05), Nevada ($4.04), Alaska ($3.90) and Illinois ($3.83).

Further Reading

ForbesGas Dips Below $3.50 For First Time In 3 Months Even As Summer Approaches-Here’s WhyBy Brian BushardForbesGas Prices Drop Near $3.40 – Here Are The States Where Prices Are Falling The MostBy Brian Bushard

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