US Drivers will Experience Low Gasoline Prices for Independence Day Travel

Americans who will be taking road trips for the upcoming Independence Day will feel a break at the pump with continuous declines in gasoline prices all over the country.

The average gasoline price for regular gas throughout the United States has fallen by 28 cents over the past month to $3.35 per gallon, said the AAA. The drop is even larger in California, which saw a 50-cent decline in the previous month. The average within that state recently reached $3.80 and keeps on falling by over a penny daily.

Average gasoline prices in San Francisco, Oakland and San Jose are $3.93, $3.80 and $3.79 per gallon, respectively.

Motorists are gaining from the decline in crude oil prices, being the raw material of gasoline. After staying at $100 a barrel for many months, crude oil prices in NYMEX began to fall in the month of May, reaching the $80 per barrel level.

The crisis in the eurozone can be attributed for these falling prices. Huge institutional investors influencing the oil market anticipate the financial challenges of the continent to weaken demand for fuel. Even the economy of China has slowed down in the previous months, which further decreased prices. Moreover, investors bet that the possibility of armed conflict over the nuclear program of Iran has declined and no longer poses an immediate threat to the flow of the Middle East’s oil supplies.

Analysts say that gasoline prices still have room to further decline before catching up with the oil market’s drop.

California usually has the highest gasoline prices in the United States’ continental region because of high taxes and requirements of special pollution-fighting fuel blends which are not found elsewhere. At most times, citizens in California spend an additional 25 to 35 cents per gallon compared to other Americans.

This spring, the price difference temporarily grew to 60 cents as planned maintenance and unplanned breakdowns at various refineries in the West Coast led gasoline prices to increase in California, even though they were dropping in other parts of the country. The other regions of the nation suffered through only one sharp increase in gasoline prices for the spring season, with the national average reaching a peak of $3.93 in the early parts of April. California experienced two sharp rises with an average in the entire state of over $4.35 in the months of March and May.

By: Chris Termeer

Chris Termeer

Chris Termeer is an oil and gas consultant, industry commentator and analyst. His book, Fundamentals of Investing in Oil and Gas provides a comprehensive overview of all aspects of the oil and gas industry, including exploration, drilling, production, storage, transportation and refining, to name but a few.

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