Independence Day travel could be some of this decade’s cheapest, thanks to falling gas prices. They are on track to be at a 13-year low this Fourth of July holiday.
As of Thursday, the national average for gasoline was $2.29 a gallon. That’s 48 cents cheaper than last year on the same date and 4 cents cheaper than a month ago. Throughout 2016, prices nationally averaged $2.07, compared with $2.43 in 2015, $3.36 in 2014 and $3.50 in 2013.
The drop in price is a reflection of the huge worldwide surplus in crude oil. Production in the United States has jumped as companies used a process called fracking to extract oil from shale, while Iran saw its exports soar with the lifting of economic sanctions after it agreed to reign in its nuclear program. Iran’s reentry into the global market came as Saudi Arabia and other Persian Gulf region players continued to pump freely as well.
The demand for all that oil, however, has not nearly increased at that same rate, as growth in China slowed and business elsewhere around the globe sputtered.
Analysts once suggested that prices might level out by the year’s end, but the United Kingdom’s vote to leave the European Union last week has put a damper on those hopes. Crude fell in the New York Mercantile Exchange by 6.5 percent on June 24, the day after to vote totals were announced, to under $48 per barrel, the biggest one-day drop since October.
Prices briefly recovered, before falling 3 percent on Thursday to $48.38 a barrel.
New factors are pushing down supplies. The United States reported this week a smaller oil yield than forecast, and strikes by Norwegian oil workers and the economic crisis in Venezuela had curbed supplies.
Still, production remains relatively robust, and the result is low gas prices. It ranged this week from $1.99 a gallon in South Carolina up to $2.90 in California.
Gas prices tend to be higher in the Washington area than the nation as a whole. Within the District, the average on Wednesday was $2.54 a gallon, according to GasBuddy.com, a website that tracks gas prices at 130,000 stations in the United States and Canada. Just over the D.C. border in Bethesda, prices topped $3. Prices were hovering around $2.40 in Silver Spring and $2.30 in Tysons Corner. Gas in Manassas is averaging above $2 and around $2.20 in Annapolis. It’s below $2 a gallon in Virginia Beach.
The American Automobile Association noted earlier this week that the cheap gas should fuel near-record holiday weekend travel. AAA spokesperson Michael Green said an estimated 36 million Americans are projected to drive 60 or more miles this weekend.
“It’s clear that the cheapest gas prices this year are motivating Americans to travel and experience the 4th of July away from home,” Green said. “Cheap gas prices can help motivate people to hit the road and travel in ways that maybe didn’t happen a few years ago.”