Fourth of July gas prices: Here’s why they’re going up
Gas taxes to rise in these five states
1 Empire Group John Burnett, River Twice Capital President Zachary Karabell, former investment banker Carol Roth and Layfield Report CEO John Layfield react to the gas tax increases.
Gas prices, which had been declining for weeks, turned around and rose again just before the Fourth of July.
The average price of regular-grade gas in the U.S. was $2.748 per gallon Wednesday, according to AAA. That’s up from $2.684 a week ago, but still down from $2.865 this time last year.
California had the highest average price, $3.776 per gallon, according to AAA. The lowest average prices were in Mississippi, at $2.347 per gallon.
AAA has predicted that a record-breaking number of Americans will travel for the holiday this year.
“For the more than 41 million motorists hitting the road this week to celebrate the Independence Day holiday, they will find gas prices cheaper than Memorial Day weekend, but more expensive than they’ve been paying the last few weeks,” said Jeanette Casselano, a AAA spokesperson.
Patrick DeHaan, head of petroleum analysis at GasBuddy, said oil prices, which have rebounded by $9 per barrel in recent weeks, contributed to drivers seeing higher prices at the pump.
“The stage was set for a nearly perfect holiday — gas prices hit their 7th straight weekly decline, oil prices had dropped as low as $51, every state had seen notable declines at the pump, it really couldn’t get a whole lot better as we approach July 4,” he said. “But then Iran attacked two oil tankers and shot down a U.S. drone and markets panicked, sending oil prices higher and now we’re suddenly under the threat of rising gas prices again amid escalating tensions with Iran and talks with China on trade, leading to higher gas prices just as millions hit the road to celebrate the holiday.”
AAA also pointed to issues like supply and demand contributing to the higher prices. The Energy Information Administration reported total U.S. stocks hit the lowest June stock level since 2015, while demand typically peaks in the summer as people travel on vacations.
Also, the owner of the largest refinery on the East Coast decided to close the facility late last month after a large fire burned there. It had produced 335,000 barrels of crude per day, according to AAA.
There also won’t be an increase in the amount of oil hitting the market from overseas. Members of OPEC and other countries agreed this week to continue oil production cuts into 2020.
That all means gas prices may continue rising after the Fourth of July, Casselano said.
“It’s typical to see increases at the pump ahead of the holiday, but we may see prices continue to jump throughout the month due to refinery interruptions on the East Coast, increasing demand and fluctuations in crude oil price,” Casselano said.