Our new Marketplace Crash Course is here to help. Sign-up for free, learn at your own pace.
A short history of gas prices
Are you one of the 39.4 million Americans planning to travel 50 miles or more from home this 4th of July holiday? A new survey from AAA says approximately 34.4 million travelers are expected to venture out on the road by motor vehicle. That’s a 3 percent increase from the 33.3 million who drove a year ago.
A slight dip in gas prices may be one of the reasons more people are hitting the road this holiday weekend.
“The recent dip in gas prices – the national average is down about 12 cents from the record it hit over the Memorial Day holiday – will help keep gasoline a relatively small part of most Americans’ vacation costs,” AAA Travel Vice President Sandra Hughes said in the news release.
Traditionally, the July 4th weekend is the heaviest time of travel in the summer season. But high gas prices can make or break some road trip plans. In this chart, you can see how gas prices have spiked and fallen over the past six years:
But for those of us concerned about where prices are right now, what can we expect to pay to fill up a tank this summer?
“I’d say that for summer, U.S. average prices would be between $3.35-$3.85,” said Patrick DeHaan, a petroleum analyst at GasBuddy.com.
If you’re wondering why gas prices have eased a bit recently, it may have something to do with crude. As Scott Tong reported in an interview with senior business correspondent Bob Moon, crude oil is the biggest factor in gas prices. This past week, crude fell about 7 percent.
“Gasoline prices move virtually in lockstep with crude prices,” said Mark Routt, an energy consultant at KBC Advanced Technologies. “So if there’s an announcement that the International Energy Agency is making available extra crude-end products on the market, the market discounts that news immediately because the market works in advance. It works typically 30 days in advance.”
In addition to the IEA (the non-OPEC producers) opening up the spigot to sell off some of its strategic petroleum oil reserves — half of which will come from U.S. reserves — there are a host of other reasons why prices have been trending lower the past couple months. DeHaan said economic jitters surrounding Greece (which would mean a stronger U.S. dollar) and Saudi Arabia suggesting they will pump more oil outside of OPEC have been reflected in prices you see when you fill up your tank.
Meanwhile, though gas prices may be easing right now, petroleum analyst DeHaan says shouldn’t get so comfortable.
“There may be more volatility in August and September as hurricane season peaks,” said DeHaan. “This may impact prices as much of our offshore production lies in a possible path of such a storm — as does a significant portion of U.S. refining capacity.”
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.