Higher gas prices ahead for the 4th
Fili Gonzalez fills up his tank in Houston.
BUSINESS Gas prices going up for holiday travelers Gas prices are expected to climb higher for July Fourth, hitting $3 a gallon at some stations across the U.S. as drivers gear up for road trips on one of the year’s busiest travel days.
GASOLINE prices are expected to climb higher on July 4, hitting $3 a gallon at some stations as drivers gear up for road trips on one of the year’s busiest travel days.
The price of regular unleaded in the Houston area is expected to average $2.69 a gallon that day, according to GasBuddy, which tracks fuel costs nationwide. That’s the highest July Fourth average since 2014, when crude oil prices topped $100 a barrel and drove the average cost of gasoline to
$3.48 a gallon.
Nationally, with the U.S. benchmark for crude settling above $74 a barrel last week, prices are expected to average $2.90 a gallon during the holiday, up from $2.22 a gallon last year. As a result, GasBuddy anticipates that American drivers will spend over $1 billion more at the pump during the first four days of July.
The motor club AAA predicts about 47 million Americans will travel during the Independence Day holiday, including about 40 million by car, an increase of nearly 6 percent from 2017. AAA Texas estimates nearly 3 million Texans will travel by car between July 3 and July 8, a 5.5 percent increase over 2017.
After declining for more than a month, gasoline prices have jumped alongside oil prices, driven by a decline in global oil inventories and news that foreign producers won’t substantially ramp up production amid a U.S. drilling boom.
The rally reverses several weeks of falling oil prices, which began to slide late last month when the Organization of the Petroleum Exporting Countries said it would increase production after two years of curtailing it. The group met late last month and agreed to lower-than-expected increases, easing market jitters.
On top of that, the U.S. Energy Department reported on Wednesday that crude oil stockpiles fell by nearly 10 million barrels, the largest decline this year. The news came a day after the Trump administration threatened to sanction countries that fail to cut imports of Iranian oil by early November, a move that could further reduce global supplies.
Nationally, gas prices reached an average of $2.98 per gallon as refiners completed their transition to pricier, summer-grade fuel blends. Gasoline prices typically peak in May or June, but Patrick DeHaan, head of petroleum analysis for GasBuddy, said fuel costs should continue to rise this summer on the strength of the oil market.
“We’ll see prices take another run at $3 a gallon,” he said.
Patrick Jankowski, lead economist with the Greater Houston Partnership, estimated the higher gasoline prices in the Houston area would tack about $15 onto an average 500-mile road trip on July 4. That’s not enough to deter most people from making the drive, he said, but it’s enough to heighten price competition among stations trying to lure budget-conscious consumers to their pumps. “They’ll be more selective in where they stop to fill up,” he said.
If prices remain elevated, he said, Houston-area families will spend, on average, an additional $630 on gasoline this year, which could have a longer-term effect on consumer spending. But it’s not until prices rise well about $3 a gallon — driven by crude prices topping $80 or $90 a barrel — that consumers cut back on gasoline purchases, he added.
Alex Hinrichs stopped on Friday morning at an Exxon station on Kirby Drive to fill his Lexus sedan at $2.89 a gallon. He said doesn’t spend time price shopping like some drivers, arguing that the difference of a few dimes per gallon won’t break the budget.
“Isn’t your time worth more than 45 cents?” he asked.
Earlier that morning, Javier Mata pulled up to a Shell station on Interstate 69 near Greenway Plaza to find gasoline at $3.09 a gallon.
Mata had eyed prices for days, debating whether to drive his Toyota pickup or book flights to Monterrey, Mexico, for a July 4 family trip. He booked the flights, knowing that each tank of gas would cost at least $65 if U.S. prices held.
“It caught my attention,” he said. “I don’t have a surplus of money.”