Millions of Americans hitting the road for an extra-long July Fourth weekend are going to pleasantly find prices at the pump more than a dollar below what they were a year ago and even lower than just a week and month ago.
A record-setting 43.2 million Americans are expected to travel by car this holiday weekend, according to AAA. That’s at least 2.4% higher than last Fourth of July and 4% higher than 2019.
“We’ve never projected travel numbers this high for Independence Day weekend,” said Paula Twidale, Senior Vice President of AAA Travel.
This summer, gas prices are well below what they were one year ago. The national average for a gallon of regular was $4.80 on July 4, 2022. Gas prices have remained steady the past couple of months, with the US national average hovering around $3.50 to $3.60 a gallon, thanks to the lower cost of oil.
“That kind of price drop is almost unprecedented,” noted CNN.
This is the second-biggest one-year price drop in the week before the Fourth of July since EIA data began 33 years ago, John LaForge, who leads real asset strategy for the Wells Fargo Investment Institute, told the news channel.
The only bigger 12-month drop occurred during the historic 2008 Great Recession. It marked the sharp decline in economic activity that started in 2007 and lasted several years, spilling into global economies. It is the most significant downturn since the Great Depression in the 1930s.
Gas prices plunged by $1.45 a gallon, or 35%, between June 30, 2008, and June 29, 2009 in the US.
During the Great Recession the economic slump began when the US housing market went from boom to bust, and large amounts of mortgage-backed securities (MBS) and derivatives plummeted in value.
After spiking last year, oil prices have plunged in part due to concerns about the Federal Reserve’s interest rate hikes slowing the US economy into a recession. But beyond that, Wells Fargo’s LaForge told CNN he expects the oil market will get tighter and “push prices higher” next year.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
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