Gas Prices Down, Traffic Up for Holiday Weekend
On the one hand, gasoline prices are up substantially from a year ago -- up about 12.6% to an average price of $2.76 per gallon for regular unleaded -- according to data compiled by gasbuddy.com.
And, as usual, the large metropolitan areas of the U.S., particularly on the east and west coasts, have some of the highest prices. As of Friday, the average price for a gallon of unleaded regular in New York City was $3.03; in Los Angeles, it was $2.99; Sacramento, $2.98; Chicago, $2.98; and Seattle, $2.96.
Falling Gas Prices: Motorists' Friend
So what's the good news on the gasoline price front? Due to a nearly $15 plunge in the price of oil in May, to about $74 per barrel, the price of gasoline has fallen recently, in some cases by more than 15 cents per gallon, from highs reached earlier this year.
The nation's lowest prices for unleaded regular can be found in Columbus, Ohio, at $2.45 per gallon; Oklahoma City, $2.46; and Kansas City, Missouri, $2.47.
Gasoline prices should continue to drop, as long as oil's price-drop holds. Every $1 per barrel drop in crude oil's price deceases the cost of gasoline by 2.5 cents per gallon. Hence, a $15 drop in oil should lower gasoline prices by 25 cents to 30 cents per gallon, if refiners and gasoline stations pass on those savings to consumers.
And so far, wholesale gasoline prices -- the cost of gasoline from the refinery -- have declined in lock step with the drop in oil prices, which bodes well for continued declines in gasoline prices at the pump.
So the price trend is the motorist's friend heading into summer, assuming oil prices remain in the $74 to $79 per barrel range and don't zoom higher.
Traffic Likely To Be Heavier
However, with the U.S. economy recovering, Americans are likely to face heavier traffic on the nation's highways and roads this holiday weekend.
AAA, the automobile service club, estimates that 32.1 million drivers in the United States will take a trip longer than 50 miles this Memorial Day weekend, up 5.4% from the 30.5 million who traveled last year, The Journal Newsreported Friday. AAA bases its estimate on how many members request maps for travel.
"It makes sense that with the economy supposedly getting back on its feet, that more people are traveling," Robert Sinclair, spokesman for AAA New York, told The Journal News.
But the chances are motorists will be in a better mood this year to cope with that traffic: That's because, as the summer approaches, Americans are likely to encounter a highly unusual sight -- gasoline prices that drop as the temperature rises.