Motorists hitting the road to celebrate the July 4 holiday may feel their pocketbooks a little more pinched than last year.
After five-straight weeks of prices dropping, gas prices are likely to increase again ahead of July 4, according to both AAA and GasBuddy.com.
With a national average of $2.90 per gallon, it is the highest Independence Day price since 2014 when the national average hit $3.66 per gallon, according to GasBuddy.com. The state average for both Arkansas and Oklahoma on Friday was about $2.58 a gallon.
For the first summer driving season in five years, the U.S. has seen the largest one-week reduction (9.9 million barrels) in crude inventories, AAA reported Thursday. The latest Energy Information Administration update reports that crude inventories now sit at 416.6 million barrels. When compared to this time last year, total crude inventories around the country are lower by 92.6 million barrels.
Tighter oil supplies combined with the economic situation in Venezuela and pending Iran sanctions have sustained volatility in the crude market, AAA adds. On Wednesday, WTI prices boosted to a closing price of $72.76 a barrel — its highest price over three years.
“If the decline in inventories continues and oil prices remain high, motorists could see a spike in gas prices later this summer despite the anticipated increase in production from OPEC and its partners,” AAA states.
The U.S. State Department ordered buyers to curb their oil purchases from Iran by November. OPEC’s smaller-than-expected oil production increase recently fueled speculation that global inventories will continue to drop, and a government report showed U.S. oil inventories dropped three times as much as expected as total petroleum exports from the U.S. hit a new record high.
“The difference may not seem significant given that current gas prices are below the peak of $2.98 per gallon hit in May, but over the first four days of July, gas purchases will cost motorists $1.02 billion more than last year,” GasBuddy adds. “Even with high gas prices, however, most motorists aren’t likely to curtail their travel during the most popular summer holiday, due to its appeal and rich tradition celebrating the nation’s birthday.”
The top fear of travelers is overpaying for gasoline, according to GasBuddy’s 2018 Summer Travel Survey. For motorists traveling out of state, GasBuddy urges motorists to check prices before crossing a state line.
“Crossing a line can be exciting and fun during summer road trips, until drivers realize that they left cheaper gas prices in the dust. Instead, motorists should mind the state line and find the best side to fill up on,” says Patrick DeHaan, head of petroleum analysis at GasBuddy. “In some extreme cases, we’ve seen consumers spend an extra $25 on a single tank when refueling on the wrong side of the line.”