HOUSTON — Drivers hitting the roads during the upcoming holiday weekend will likely encounter good news: the cheapest Labor Day weekend gasoline prices since 2010.
The forecast comes amid falling domestic and global crude prices, analysts at GasBuddy said. The benchmark price for U.S. crude is down nearly $9 per barrel since the Memorial Day weekend, and the the international price is down $7 in the same period.
A downward trend in gasoline prices began in July and will likely continue through autumn, the gasoline price monitor said.
Interestingly, that trend coincides with several global conflicts in and around regions that are major global energy producers. Those conflicts including tension between Ukraine and Russia, fighting between Israel and Hamas and the growing influence of Islamic militants in Syria and Iraq.
In June, the conflict in Iraq contributed to an increase in crude oil and gasoline prices.
But Tom Kloza, GasBuddy’s chief oil analyst, tells FuelFix that situation was only a blip that scared the market. On a broader level, global prices are more strongly influenced by huge levels of U.S. oil production, especially since those conflicts haven’t appears to contributed to drops in crude production.
Gasoline prices are sliding, and nationally, gasoline prices thus far in August have averaged $3.458, a $0.13 per gallon dip from the July average.
Texas is among 10 states likely to see average gasoline prices below $3.25 per gallon over the holiday weekend.
Kloza predicted that even more significant gasoline price declines could come in late September, when much of the rest of the country country is expected to experience regular gasoline prices below $3.25. Some stations could even reduce prices below $3 per gallon.
The autumn drop in gasoline prices is a regular occurrence since refiners can change their blends for gasoline starting Sept. 15. In summer months, they’re required by law to use a more costly blend that contains fewer of the additives that contribute to smog during the summer ozone season.
“Think of that as gluten-free gas,” Kolza said. “After Sept. 15, you can throw all the cheap flour into it.”
In the Houston metro area Wednesday morning, gasoline prices averaged $3.249 per gallon. That’s down from a peak this year of $3.493 per gallon in late June.
GasBuddy also forecast that U.S. demand for gasoline will likely be about 382 million gallons per day over the weekend — down about 5.2 percent from pre-recession peaks in 2006 and 2007.
The most expensive Labor Day gasoline prices in the U.S. occurred in 2012, when gasoline prices averaged more than $3.83 per gallon.
Today’s low gas prices mean travelers would be able to dedicate a greater portion of their budget to travel costs, officials at AAA said.
The travel group said that 34.7 million Americans will travel at least 50 miles from their homes during the upcoming Labor Day weekend, the highest total since 2008. Most of them — 29.7 million — will travel by car.
The travel group attributed that hike to the growing number of Americans who are entering the labor force but noted that consumer spending on things like travel is rising, despite relatively flat income growth in the U.S.
That seems to be an indication that Americans are willing to take on credit card debt in order to travel, AAA said.
“This year, Americans are more optimistic about their financial situation,” said Marshall Doney, AAA’s chief operating officer, in a statement. “Consumer spending continues to outpace disposable income, indicating that Americans are comfortable using their credit cards to take one last summer vacation this year.”