Gas Prices Slightly Higher This Memorial Day Weekend
AAA says high domestic production and lower use push prices down for the rest of the summer
The group says more than 31 million Americans will be hitting the roads to travel more than 50 miles to a beach, campground or getaway. That's up from last year but still shy of the record 37.3 million people driving on the holiday in 2005.
While gas is up slightly this holiday weekend, averaging $3.66 a gallon compared with $3.64 last Memorial Day, gas prices this summer are expected to dip. Prices should average between $3.20 and $3.40 per gallon during the summer, depending on the state, says AAA, the country's largest motor club. That's good news for road-trippers.
Prices fell in April, down about 13 cents per gallon, or 3.5 percent, to an average of $3.55 per gallon nationally, according to AAA. That's the lowest average for the month of April since 2010. While they're back up a bit for May, experts expect the price will head back down slightly in the summer months.
Increased domestic production of crude oil and geopolitical stability in the Middle East are two reasons for falling fuel prices, says Avery Ash, a spokesman for AAA.
In 2011 and 2012, conflicts in Libya and Iran, respectively, caused the price of crude oil to spike in the springtime, which drove up prices at the pump. The Syrian civil war this year, by contrast, has not disrupted production or shipping.
"At the same time, though, we have seen this year a dramatic increase in domestic crude oil production," Ash says. "That increase in crude oil production can certainly help to protect from some of the volatility that might otherwise be seen from relying on imported crude oil."
Lower demand has helped drive down prices. Lately, the United States has been consuming about 2.2 million barrels of oil less than its 18.83 million barrel-per-day average, says Rayola Dougher, senior economic advisor for the American Petroleum Institute. "That's a significant amount."
Part of the reason is that people are just driving less to save money in this economic recession. But they're also driving more efficient vehicles than in the past, Dougher says.
The price gap between premium and regular gasoline has reached an all-time high of 30 cents, according to the U.S. Energy Information Administration. It hit that level at the end of 2012 and has since held steady. But the price gap between premium and regular has been steadily declining on a percentage basis, from more than 20 percent in 1999 to less than 10 percent today, according to the EIA.
That's in part to the increasing use of ethanol as an octane booster in gasoline over the last decade. Decreased consumption of premium gasoline over the past two decades might also be driving down the price difference between premium and regular gasoline, the EIA says.
The United States consumed a total of 6.87 billion barrels of oil in 2011, according to the EIA, about 22 percent of total world petroleum consumption.
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