Gas Prices Stay Low(er) Ahead of Summer Travel Season (NYT)
Memorial Day marks the start of the summer travel season in the U.S. Fortunately for Americans, gas prices have fallen way down from a year ago.
Credit a stronger oil supply and weaker-than-expected demand for why some families could save hundreds of dollars on Memorial Day road trips this weekend.
The national average price for regular gasoline is a full dollar a gallon lower than a year ago. Drivers paid over $4.60 in May 2022, and prices had reached $5 by the second week of June when inflation peaked. This week, they paid about $3.50 a gallon for regular gasoline, according to AAA.
Prices spiked last year after Russia invaded Ukraine in February. But the U.S. and other large countries released oil from their strategic reserves when prices surged, which has helped keep prices lower.
Why it matters:
Gas prices are posted on big colorful signs along major highways and in small towns. Thus, they can have a powerful psychological impact on consumers and their feelings about prices, inflation, and the overall economy.
Thanks to better-than-expected supply and relatively low demand, the U.S. benchmark oil price gradually fell from around $120 a barrel last summer to about $72 a barrel on Thursday.
Gas impacts millions of Americans, as AAA forecasts that Memorial Day road trips will be up 6% over last year, with more than 37 million Americans driving to their destinations.
In a notable shift, many people buy fuel at big-box retailers such as Costco, BJ’s, and Sam's Club, which often have lower prices than independent gas stations. They took market share as prices rose in 2021 and 2022 and might not relinquish it anytime soon.
