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Gas prices jump ahead of holiday weekend travel

July 03, 2019 - 8:10 am
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AUSTIN (Talk1370.com) -- Prices at the pump are higher this week as a record number of Texans are expected to travel for the July 4 holiday.

The average price for a gallon of regular unleaded fuel this week is $2.42. That's eight cents higher than last week, but still 21 cents cheaper than a year ago. Similar increases are being seen across the state and the country, with the statewide average up eight cents to $2.46 and the nationwide average up seven cents to $2.75.

Of the major metropolitan areas surveyed in Texas, drivers in El Paso are paying the most on average at $2.76 while drivers in Amarillo and Brownsville/Harlingen are paying the least at $2.31 per gallon.

"While gas prices are increasing, Texas drivers will still pay less for gas this Independence Day compared to one year ago," said Daniel Armbruster with AAA Texas. "The statewide average is 19 cents cheaper per gallon today than compared to this time last year."

AAA says a number of factors are contributing to the rise in gas prices:

  • Crude oil prices: West Texas Intermediate (WTI) was priced as low as $51.13 in mid-June, but has since jumped more than $8 to land as high as $59.43. Crude accounts for as much as 60% of the retail gasoline price.
  • Supply: The Energy Information Administration (EIA) reports total U.S. stocks at 232 million barrels for the week ending June 21, which is the lowest June stock level seen since 2015.
  • Demand:  Demand remains robust for peak summer driving season at a four-week average of 9.6 million barrels per day. EIA reports gasoline stocks drew down for a second week in its latest report. This trend isn’t likely to stop this week, especially with 41.4 million Americans expected to hit the road for the Independence Day holiday.
  • Philadelphia Energy Solutions (PES): Last week, PES announced that they will permanently close the South Philadelphia refinery this month, which is the oldest and largest refinery on the East Coast. The announcement came following a June fire and explosion at the refinery, which produces 335,000 barrels of crude per day (42 U.S. gallons per barrel). While gasoline stocks from Canada, neighboring refineries, and the Colonial Pipeline will help backfill supply, retailers will likely face increased transportation costs which will drive up prices in the Northeast and surrounding regions.
  • Organization of the Petroleum Exporting Countries (OPEC): OPEC and its partners will meet today and tomorrow in Vienna and are likely to extend the current production reduction agreement of 1.2 million b/d through the end of the year, which could push crude oil prices more expensive.

More Texans than ever recorded by AAA, exceeding 3.5 million, are making plans to honor the red, white and blue with an Independence Day getaway this year. (AAA began tracking holiday travel in 2000.) Overall, national travel volume for the holiday is expected to rise 4.1% over last year to total nearly 49 million people, with an additional 1.9 million people planning road trips and other vacations to celebrate America’s birthday.

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