Seven in ten Americans fill up their cars in the days preceding Memorial Day. Every single one of them is feeling the pain at the pump this year as gas prices are up 31 percent from the same time period last year.
According to the holy grail of gasoline indexes, the American Automobile Association (AAA), gas prices are up to an average of $2.97 per gallon. This is the highest prices of a Memorial Day weekend holiday in the last four years. The 2014 prices were so high because crude oil was up in the triple digits, mimicking the spike in crude this season.
Although prices are still relatively low around some sections of the nation, 15 states are already seeing prices of over $3 per gallon or higher. Hawaii and Califonia are especially feeling the brunt, with the gas prices soaring to over $3.70 per gallon. Prices at the pump historically spike a good amount leading up to the three-day weekend, however, this increase is significant enough to catch many consumers off guard. The days of the $2 per gallon prices seem to be long gone in the near future.
Patrick DeHaan, a petroleum analyst for GasBuddy believes that these prices will be sustained for the next few days and then begin to decrease as demand subsides. How low they will end up is anyone’s guess.
The sudden uptick in gas prices can be attributed to a variety of factors, leading up to the proverbial perfect storm at the pump. Overall strong consumer confidence has many Americans hitting the road to jumpstart their summer. The AAA estimates that more than $35 million people will travel via automobile over the three-day weekend.
United States President Donald Trump’s controversial decision to withdraw from the Iran nuclear deal has many worried that renewed sanctions against the Middle Eastern oil-rich country will limit some of the nation’s most valued supply of oil. As the fifth-largest producer of oil, Iran’s contribution is critical to the US supply chain. In addition, the base price of crude oil is up more than 50 percent as compared to last year, recently jumping over the critical $80 per barrel mark.