A record one-third of the U.S. population is expected to take to the nation’s roads, rails and skies for Christmas and New Year’s travel as motorists discovered an early gift: gasoline prices at two-year lows and expected to get even cheaper.
The American Automobile Association expects 112.5 million Americans, around a third of the U.S. population and about 4 percent more than last year, to travel by car, train and plane from Dec. 22 to Jan. 1.
The Transportation Security Administration anticipates air travel alone will increase 6 percent from last year.
The expected increase reflects AAA’s inclusion of 11 days in the predicted travel period, rather than last year’s 10 days, as well as a still-solid U.S. economy, said Robert Sinclair, a spokesman for the motorists’ group.
“People have money in their pockets,” he told Reuters. That is despite investor worries that have taken a heavy toll on stocks over the past few weeks.
Meanwhile, gasoline prices, which are already at 2-year lows for this time of year, should drop even lower in the coming days; after the price of oil and wholesale gasoline tumbled on Thursday.
Gasoline prices have fallen by about 25 cents per gallon in the last month to a national average of $2.36 per gallon, offering some consolation to drivers, who will face delays up to four times the typical travel time in major cities like New York and Atlanta before Christmas.
For example, gas prices in Florida are 10 cents less than the average price on Christmas Day 2017. The state average is $2.26 per gallon, yet Florida motorists are beginning to find pump prices below $2 a gallon at various filling stations in Jacksonville, Orlando, and Tampa Bay.
On average, Florida drivers are paying nearly $10 less for a full tank of gas, compared to when prices peaked last summer. During the past 10 weeks, pump prices plunged an average total of 56 cents.
An estimated 102.1 million Americans are forecast to travel via automobile between now and New Year's Day. Nationwide, the average price for gasoline is $2.35 per gallon and falling (check today's price). Americans are paying $9 less for a full tank of gas, than they did when prices peaked in the summer. The national average has declined 13 cents this month, and a total of 55 cents since mid-October.
"A holiday road trip will become even more affordable, as AAA forecasts another round of falling gas prices," said Mark Jenkins, spokesman, AAA - The Auto Club Group.
"Wholesale gasoline plummeted on Thursday, which will reduce the cost for retailers to buy and sell gasoline. Unless the market turns around, drivers should see gas prices fall another 5-15 cents, during their holiday road trips."
What's Driving the Price Drop?
- The global oil market is considered oversaturated, as crude production from the U.S. and many other countries have hovered near record-highs, outpacing demand
- There is uncertainty in the market about global economic growth, creating a bearish sentiment on fuel demand
- Futures prices were dragged lower by virtue of weakness in equity markets, after the Federal Reserve added a quarter point to the benchmark interest rate on Wednesday, and concerns of a government shutdown were renewed on Thursday
- Oil prices are the lowest since July 2017. The price for a barrel of WTI crude settled at $45.88 Thursday on the NYMEX
- Gasoline futures are at 2-year lows (September 2016). RBOB dropped 6 cents on Thursday, and is down 11 cents on the week.
- Wholesale gasoline prices dropped nearly 10 cents on Thursday
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