Gas prices climb
Millions to hit the roads over Memorial Day
Memorial Day travel is expected to be at 12-year highs this weekend even as gasoline prices soar to their highest level in several years.
Consumers on average will pay nearly 60 cents a gallon more for fuel this year than they did a year ago, but that doesn’t look to slow demand, said Leslie Gamble, spokeswoman for AAA Oklahoma.
“The economy is strong. Unemployment is low. People seem to be feeling good about what’s ahead for them in terms
of their finances and aren’t concerned about the price of gas enough to make a difference in their travel habits,” Gamble said. “Historically, we’ve seen that happen once the price hits $3 a gallon. That seems to be the point where people make different choices.”
More than 41.5 million Americans are expected to travel over Memorial Day weekend, up 5 percent from one year ago, according to AAA. About 88 percent of those travelers are likely to drive.
Beyond Memorial Day, however, higher prices could stall travel, according to a survey from GasBuddy. That group said only 58 percent of respondents said they likely will take a road trip this summer, down 24 percent from last year. “These prices have had an impact with consumers,” said Dan
McTeague, a senior petroleum analyst at GasBuddy. “60 cents a gallon makes a difference. Drivers are telling us that 24 percent have decided to cut back on vacation and turn it into a staycation as a result of the price increase.”
The average price for a gallon of regular unleaded gasoline was almost $2.68 Wednesday, up 6 cents over the past month and 57 cents more than one year ago, according to AAA.
Nationwide, Wednesday’s average price was about $2.95, up more than 18 cents over the past month and up 59 cents from one year ago.
Gasoline prices in Oklahoma typically are among the lowest in the country because the state has one of the lowest fuel tax rates and because of the proximity to refineries and other oil and gasoline infrastructure.
Prices have soared over the past few months as oil prices have spiked. Global oil demand has continued to grow while production outside the United States
has slowed. The Organization of Petroleum Exporting Countries and Russia have exceeded planned production cuts while the Trump Administration’s withdrawal from a treaty with Iran could reintroduce sanctions on Iranian oil exports.
U.S. oil production is at record highs, but that is not enough to offset global production cuts. Domestic benchmark West Texas Intermediate crude closed at $71.84 on Wednesday, up 42 percent from $50.50 one year ago. Global benchmark Brent crude closed at $79.80 a gallon Wednesday.
“A $21 increase in the price of oil is not something you can tiptoe around. It has to be included in the price of gasoline,” McTeague said. “It’s not likely we will see prices decline. Most are indicating oil prices have further to go. Either way, these higher prices are likely to be with us through summer and perhaps pushing into 2019.”