The national average price of regular unleaded gas will hit the lowest mark this Labor Day break since 2004, AAA says. The national average was $2.41 a gallon Friday, down more than a dollar from a year ago when it was at $3.43.
Lower gas prices seems to be spurring more out-of-town road trips. The AAA expects the busiest Labor Day weekend for motorists since 2008, with 30.4 million taking to the highways, up 1.1 percent from a year ago. A rebounding economy with solid job growth is being credited with the increase in road travel, along with cheaper gasoline.
Prices should continue to edge downward through the weekend after BP’s refinery in Whiting, Ind., the largest in the Midwest, was repaired last month, increasing gasoline supplies, said AAA spokesman Avery Ash. The facility was unexpectedly shut down earlier in the August.
Gas prices have mostly followed the decline in crude oil prices since February as production as been high both in the U.S. and overseas. Other factors include weaker global demand and troubled economies in Europe and Asia.
However, oil prices have been on a rollercoaster ride recently, dropping below $40 a barrel early last week for the first time in six years and then rebounding as much as 28 percent in recent days on reports of lower-than-estimated U.S. production and possible cuts in output by the Organization of the Petroleum Exporting Countries (OPEC).
The recent oil rally could affect gasoline, modestly propping up prices after the holiday weekend, Ash says.
“We definitely believe gas will follow a downward trend for the remainder of the calendar year,” said Gregg Laskowski, a senior petroleum analyst at gasbuddy.com. He says gas could fall below $2 a gallon nationally by December.