AAA Forecasts Nearly 40 Million Americans will Travel by Car for the Holiday

“If U.S. demand remains strong, domestic and global supply decline and crude inventories continues to sell over $70/bbl, motorists may see the national gas prices average to potentially jump back up to nearly $3/gallon in coming months,” added Casselano.

Quick Stats

• The nation’s top 10 least expensive markets are: South Carolina ($2.53), Alabama ($2.53), Mississippi ($2.53), Louisiana ($2.57), Arkansas ($2.58), Oklahoma ($2.59), Tennessee ($2.60), Virginia ($2.60), Missouri ($2.60) and Texas ($2.64).
• The nation’s top 10 largest monthly decreases are: Delaware (-18 cents), Illinois (-16 cents), Indiana (-16 cents), Florida (-15 cents), Virginia (-15 cents), Maryland (-14 cents), Texas (-14 cents), Georgia (-13 cents), Iowa (-13 cents) and Nebraska (-13 cents).

Mid-Atlantic and Northeast

On the week, motorists in West Virginia (+3 cents) and Washington, D.C. (+2 cents) were the only states in the Mid-Atlantic and Northeast region to see gas prices increase. Rhode Island (-2 cents) saw the largest decrease while other states saw pump prices drop by a penny or remain stable since last Monday. In the region, Connecticut ($3.08), New York ($3.01), Washington, D.C. ($3.01) and Pennsylvania ($3.01) carry the most expensive state gas price averages.

The U.S. Environmental Protection Agency has announced a decision to change the Air Quality Plan and eliminate the low-grade summer gasoline (7.8-lb RVP) mandate during the May 1 – Sept 15 summer driving season for six western Pennsylvania counties. This type of gasoline is more expensive to produce as compared to winter-blend. The impacted counties include Armstrong, Beaver, Butler, Fayette, Washington and Westmorland counties. The lift of the mandate is set to go into effect August 14, pending any objections. However, it is unclear if suppliers will deliver the lower grade gasoline into the market this summer.

With a build of 1.2 million bbl, the Mid-Atlantic and Northeast region saw the largest build of any in the country. Sitting at 67 million bbl, inventory measures at the highest level since June 2017. The higher inventory levels are contributing towards cheaper gas prices.

Oil market dynamics

At the close of Friday’s formal trading session on the NYMEX, WTI increased 70 cents to settle at $74.15. Crude prices reached new highs not seen since 2014 following a number of developments that will impact supply in the coming months. These include: OPEC confirming that it will work with its partners to produce a record high 11 million barrels per day of crude in July: the U.S. seeking greater crude oil sanctions on Iran; and the continuing economic crisis in Venezuela.

Moreover, crude prices spiked this week after EIA's weekly report revealed that for the first summer driving season in five years, the U.S. has seen the largest one-week reduction (9.9 million bbl) in domestic crude inventories. Crude inventories now sit at 416.6 million bbl. When compared to this time last year, total crude inventories around the country are lower by 92.6 million bbl. The market will watch supply and demand closely in July for indicators that increased crude production from OPEC and its partners has helped to meet growing global crude demand. If it appears that supply remains tight amid high demand, prices may continue to climb.

In other news, the U.S. oil rig count dropped by four last week, according to Baker Hughes, Inc., bringing the total number of rigs to 858. However, there are still 102 more rigs now than a year ago.

Motorists can find current gas prices along their route with the free AAA Mobile app for iPhone, iPad and Android. The app can also be used to map a route, find discounts, book a hotel and access AAA roadside assistance. Learn more at AAA.com/mobile.