According to AAA, more than 36.3 million Americans took a road trip on the 4th of July weekend. Those who did, were surprised to find the lowest gas prices in the US in 11 years.
AAA Spokesperson Mark Jenkins said that even though there was high demand, gas prices continued to fall throughout the weekend, helping make travel more affordable. Demand for gas is currently at an all time high.
The demand was expected to increase pressure on refineries. But refineries have already increased their output. So gasoline supply has more or less kept pace with the increasing demand, leading to lower oil prices.
Gas prices continue to decline through the nation
Gas prices have been falling for close to a month. The average gas price decreased for 27 days continuously, in Georgia and Florida and 26 days in Tennessee. During this time, the cost for regular unleaded fell by 12 cents, 14 cents and 15 cents in Florida, Tennessee and Georgia respectively.
Nationwide, the average price of gasoline has reduced by 50 cents compared to the same time last year. It is close to $1.39 lower, compared to two years ago. Motorists are saving close to $20 on a full tank of gas compared to the rates they paid in July 2014.
Oil prices might stabilize soon
The oil market has recovered, after falling close to $5 in the aftermath of Brexit. They are relatively stable now. It is good news because the cost of oil influences the cost of gasoline by about 2/3rd. The average cost of crude oil last week was $48.28, which is 74 cents lower than the week before.
Some of it is because of the increased supply from Canada and increased production from OPEC members. For instance, Nigeria and Libya are ramping up their production.
Nigeria recently increased its oil production to 2.7 million barrels of oil per day, up from 1.9 million barrels after making extensive repairs to its oil installations and pipelines which were attacked and wrecked by a group that calls itself the Niger Delta Avengers.
Rival Libyan oil companies have also reached a deal to unify the sector, which is expected to double production to 700,000 barrels per day. Before the 2011 revolution, Libya used to produce 1.6 million barrels of oil every day. A unified oil sector will be shot in the arm to the Libyan unity government.