Not a lot of folks will be taking advantage of it, but the folks at AAA are telling us that prices at the gas pump this coming Memorial Day weekend will be the cheapest in nearly two decades.
As pump prices continued to increase across the country with nearly every state’s average pushing more expensive on the week, on average by four cents, it’s historically low for a Memorial Day holiday just the same. At the start of the Memorial Day work week, the national gas price average is $1.87.
The last time the national gas price average leading into the holiday was under $2/gallon was 17 years ago in 2003. That year motorists paid, on average, $1.50 to fill-up. Gas prices this year won’t be as cheap as 2003, but today’s national average is a full dollar cheaper than one year ago.
Molly Hart, spokesperson for AAA – The Auto Club Group — says, “Gas prices around Memorial Day have not been this cheap in nearly 20 years. However, as the country continues to practice social distancing, this year’s unofficial kick-off to summer is not going to drive the typical millions of Americans to travel.” She adds, “Despite inexpensive gas prices, AAA anticipates this year’s holiday will likely set a record low for travel volume.”
As reported last week here on Moody on the Market, for the first time in 20 years, AAA has not issued a Memorial Day travel forecast due to the coronavirus impacts on the underlying economic data used to create the forecast.
Americans can expect gas prices to continue to push more expensive, possibly hitting $2/gallon in the next few weeks, mostly due to demand increasing as states re-open. This week will also bring the Environmental Protection Agency’s waiver on the sale of winter-blend gasoline to an end. Stations will switch over to summer-blend gasoline, which has a lower Reid Vapor Pressure to prevent excessive evaporation when outside temperatures rise. Reducing the volatility of summer gas decreases emissions that contribute to unhealthy ozone and smog levels. Typically, the switchover to summer-blend can cause gas prices to spike during the summer driving season, but that will likely not be the case this year due to the impact of COVID-19 on demand and crude oil prices.
In the Great Lakes and Central States, the Energy Information Administration (EIA) reports that regional gasoline stocks have decreased for six straight weeks, bringing total stock levels down to the lowest measurement of the year at 54 million bbl. However, stocks remain above the year-ago level of 49.5 million bbl and the five-year average of 52.6 million bbl.
At the end of Friday’s formal trading session, WTI increased by $1.87 cents to settle at $29.43 per barrel. Crude prices increased last week amid growing market optimism that crude demand continues to rebound as more states re-open and demand for gasoline has grown in recent weeks. For this week, crude prices may continue to rise if the market believes that the 9.7 million b/d production reduction agreement for May and June 2020 between the Organization of the Petroleum Exporting Countries and other major crude exporters, including Russia, is helping to rebalance the global oil market as demand remains low due to COVID-19
You can find current gas prices along your route with the free AAA Mobile app for iPhone, iPad and Android. The app can also be used to map a route, find discounts, book a hotel and access AAA roadside assistance. Learn more online at AAA.com/mobile.