If you’re planning to hit the road for an out-of-town Memorial Day weekend trip, be grateful that gasoline is about 90 cents a gallon cheaper than it was a year ago.
Still, prices at the pump are averaging about $2.74 a gallon, which is a new high for the year. The good news: Analysts are calling the current price point a likely peak for the year, with gas poised to pull back in the coming summer months.
Pump prices have moved higher nationwide in recent months, largely due to the global rally in crude prices. But the 33 million Americans that AAA projects will be taking a car trip this weekend will find the cheapest prices for this holiday weekend since 2010.
Motorists nationwide are paying less to refuel their vehicles year-over-year. The price is discounted by $1 or more in 21 states and Washington, D.C., with the largest savings in Michigan (-$1.13), Kentucky (-$1.13) and Indiana (-$1.12), despite the recent price spike in the Midwest.
Writes AAA Spokesman Michael Green: “Volatility will likely continue to characterize the global market in the near term as traders closely watch the balance between supply and demand. In particular, more expensive crude could lead to an increase in production and supply, which could put a ceiling on the current rally in price.”
The sharp drop in oil and gas prices last fall and winter led to an average household savings of about $650 this year, according to the Energy Department.
AAA says it expects that 37.2 million Americans will travel more than 50 miles this weekend — a 4.7 percent increase from last year. That’s the highest number for the holiday since 2005. Of those travelers, about 33 million will drive, a 5.3 percent increase over last year, AAA said.
However, so far this year, consumers have been hesitant to spend the savings realized by cheaper gasoline. Retailers, restaurants and hotels have not enjoyed the increased consumer spending that economists had projected as a result of low energy prices.