Falling gas prices will make for a festive Fourth of July
Oil’s impact means travelers will have more to spend on holiday
Talk about fireworks. For the first time in its 17-year history, consumer data tool GasBuddy projects that gasoline prices will be lower on the Fourth of July than they were on New Year’s Day.
The reversal in fortune is a direct result of crude oil’s unexpected decline in 2017 amid a growing realization that the global glut of petroleum production isn’t going away anytime soon. For consumers, that translates into unforeseen savings just in time for the heart of the summer travel season.
GasBuddy projects a nationwide average of $2.21 per gallon July 4, which would be 12 cents lower than the price at the year’s inception. That’s also the lowest price on Independence Day since 2005.
It’s “quite the dramatic turnaround” after projections that gasoline would near $3 per gallon this summer, GasBuddy petroleum analyst Patrick DeHaan said.
Americans save $4 million per day for every 1-cent drop, he said.
At least one station in 35 states offered gas for less than $2 per gallon.
Gas is typically 47 cents more expensive on July 4 than on the previous Jan. 1, according to GasBuddy.
The usual variation is largely due to lower demand in the wintertime.
“A fundamental principle of the way gas prices work is you never see gas prices lower on the largest, most popular summer driving holiday than you do on New Year’s Day,” DeHaan said.
Prices have been diving for several weeks as global oil prices contracted.
Nationwide prices averaged $2.26 Tuesday afternoon, down 11.8 cents from a month ago.
The U.S. energy industry has continued pumping oil and natural gas at a steady clip, keeping supplies high despite an effort by the Organization of the Petroleum Exporting Countries (OPEC) to boost prices through production cuts.
The price of West Texas Intermediate oil, the U.S. benchmark crude, traded in the $42-to-$44 range over the past week. Less than a month ago, oil traded above $50, and experts projected prices of $60 to $70 this year. That looks unlikely.