Americans shake off high gas prices for holiday weekend trips

U.S. gasoline prices hit a new record this weekend, but despite soaring costs, millions of U.S. motorists were on the road ahead of the unofficial start of summer.

Even if the average cost of a gallon of gasoline tops $4.60 for the first time, some 35 million people are expected to be on the road over Memorial Day weekend, which traditionally marks the start of the U.S. summer driving season, according to the AAA. Auto Group.

That would be a 5% increase from last year’s figure as holidaymakers indulge in post-pandemic freedom.

“I think all systems will be down this weekend,” said Tom Kloza, global director of energy analysis at Oil Price Information Service. “There is an attitude in the public, which is: ‘This is what I deserve’.”

But despite the peak early summer, high prices are starting to take a toll on motorists. While drivers may be willing to splurge on vacations, they’ve cut back on everyday expenses for commuting and social travel.

“We’re starting to see the term ‘demand destruction’ come up again,” Kloza said.

Gasoline prices have climbed rapidly over the past two years as the reopening of the U.S. economy pushes demand to outstrip supply. Russia’s invasion of Ukraine in February rocked the crude oil market, accelerating fuel costs.

The national average price on Saturday was $4.61 a gallon, more than 50 percent higher than a year ago. In California, they’re more than $6 a gallon. Diesel is more expensive.

That’s already starting to force America’s gas-guzzling drivers to rethink their car usage. The average American household consumes 90 gallons of gasoline a month — far more than any other major economy — or $414 at current prices.

The latest data from the U.S. Energy Information Administration showed gasoline demand at 8.8 million barrels per day in the four weeks ended May 20. This was a 3% decline from the previous week and nearly 700,000 barrels less than a year earlier.

“Clearly, high oil prices are doing what I would call low-level damage to demand,” said Patrick DeHaan, head of oil analysis at pricing app GasBuddy. He suggested holiday weekend demand could be 7-fold lower than in 2019. 13%.

Rising fuel costs fueling economy-wide inflation have become a serious problem for President Joe Biden, whom many voters blame for high oil prices despite their limited ability to affect them.

As the midterm elections loom, the Biden administration has taken steps to lower prices, including Unlock unprecedented quantities Extracting crude oil from strategic reserves, upgrading Restrictions on Ethanol Mixtures And rely on U.S. oil companies and foreign producers to turn on the taps.

Other options have also surfaced, including a cut of 18.3 cents federal gasoline tax or give up summer pollution rules.

Bloomberg reported last week The administration is in talks with U.S. refiners to support the reopening of some closed refineries. The White House did not respond to a request for comment.

“I do hope he pulls one of those levers at some point,” Cloza said. “They want to be seen as doing something.”

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