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CHARLOTTE, N.C. (March 28, 2019) – Spring fever may be in the air, but American motorists already have summer road trips top of mind. AAA’s latest Gas Price survey found that if gas prices remain low, 1 in 3 Americans (33 percent) would likely plan another summer road trip while 27 percent would increase the distance of one – with Generation X more likely to do both than Baby Boomers.
“Though gas prices have been on the rise lately and are mirroring last year’s prices, the summer prices are still expected to be lower than they were last year,” said Tiffany Wright, AAA Carolinas spokesperson. In addition to increasing the number or mileage of summer road trips, the AAA survey shows that Americans said lower gas prices would encourage them to spend or save more, but this varies based on generation and region:
Springing Gas Prices “Historically, early spring triggers an increase in pump prices due to an increase in demand as Americans put the winter blues behind them and drive more. Another factor pumping up the price is the switchover to summer-blend gasoline, which is more expensive for refiners to produce,” added Wright. The difference between summer- and winter-blend gasoline involves the Reid Vapor Pressure (RVP) of the fuel. RVP is a measure of how easily the fuel evaporates at a given temperature. The more volatile a gasoline (higher RVP), the easier it evaporates. Summer-blend gasoline has a lower RVP to prevent excessive evaporation when outside temperatures rise. Reducing the volatility of summer gas decreases emissions that can contribute to unhealthy ozone and smog levels. A lower RVP also helps prevent drivability problems, especially in older vehicles. Summer-blend is more expensive to produce and that cost is passed on to the consumer each spring. Oil Dynamics Moreover, moving into spring, crude prices will likely increase as the Organization of the Petroleum Exporting Countries (OPEC) continues to implement its agreement with other global crude producers to cut production by 1.2 million b/d, which remains in effect through June. OPEC has announced that it will not meet in April to discuss the pact; instead, it will meet on June 25 and 26 and may announce a decision to end or extend its agreement at that time. OPEC and its partners will likely look toward global pricing trends around the time the cuts are set to expire as well as global crude demand forecasts, and how well members of the reduction pact have adhered to the production cuts to determine if it should extend its pact beyond June. If it does and crude prices rise dramatically, American motorists could see pump prices spike later in the summer. Additionally, U.S.-imposed sanctions meant to curtail crude exports from Iran and Venezuela will likely tighten global supply and help crude prices inch up this spring. The exact price impact will be determined by how stringently the U.S. enforces the sanctions. Some market observers believe the U.S., which is now the world’s leading crude producer, could help meet global demand because of its newfound export prowess. However, growth in domestic demand for crude, particularly during the high demand driving season this summer, may limit just how much the U.S. is able to contribute to the global crude market. Summer Look Ahead Visit GasPrices.AAA.com for national and state gas price averages and trends. |
