The second holiday of the 2017 Summer Driving Season, Independence Day, is almost upon us. With the July 4th Holiday falling on a Tuesday this year, a number of folks are planning four-day weekends, and others may extend their get-aways even longer. For anyone thinking about hitting the road this holiday weekend, they are in for a real treat. Today’s national average for a gallon of unleaded gasoline is $2.263 (Source: GasBuddy.com).
Personally, I haven’t yet figured out what to make of this year’s gas prices other than I’m luvin ’em! And I’m not the only one. According to Patrick DeHaan, senior petroleum analyst for GasBuddy, “While gasoline prices have fallen to new seasonal lows just ahead of July 4th, that’s not the only record to talk about: for the first time in GasBuddy’s 17-year history of tracking fuel prices, the national average gas price is poised to be lower on July 4th than it was on New Year’s Day by 12 cents. Over the last decade, the national average has been as much as $1.04 per gallon higher on July 4th than New Year’s Day while the ge year sees prices 47 cents higher on the holiday.”
What appears to be missing in the mix is the bump- or run-up in prices that occurs at gas pumps in the days leading up to the holiday weekend. Gas prices have not been this low since 2005 when the average for the Independence Holiday was $2.20 per gallon.
What’s the data behind these low prices? Here are some possible answers (Source: AAA):
• Cost of crude oil: A barrel of West Texas Intermediate (WTI) closed at $45.09 on Wednesday, June 28, 2017 (Source: NASDAQ).
• Demand for crude oil: Last week’s report from the Energy Information Administration (EIA) shows that demand for crude oil remains robust as gross inputs at U.S. refineries have topped 17 million barrels per day in each of the past nine weeks.
• Crude oil inventories: Inventories remain high, with current storage levels near 500 million barrels, approximately 9 million barrels above last year.
• Oil Rig Count: Baker Hughes, Inc. most recent report (last week) show that the U.S. oil rig count grew by 11 last week, landing at 758 rigs – a three year high.
The above data suggests that the higher volume of available crude oil inventory may be contributing to the falling prices at the gas pump. The cheaper price per barrel has also contributed to refineries producing record amounts of gasoline for most of 2017.
Whether you are planning a road trip or a staycation, Independence Day is a reminder to every citizen of these United States that freedom is not free, and there is a cost to be paid for it every day.
Have a safe Independence Holiday! Here’s hoping for some fantastic fireworks! Happy motoring!