The United States celebrates its birthday on Monday, but American drivers are already unwrapping presents in the form of falling gas prices. Sure, it’s sort of like getting a pair of socks since prices are down from all-time highs, but it’s still welcome news for millions of motorists preparing to hit the road over the July 4 weekend.
Gasoline prices have declined for a second straight week amid a similar dip in global oil prices. The average price for a gallon of gas stood at $4.857 on Thursday, according to AAA. That’s down from $4.940 a week ago and well below the record price of $5.016 set on June 14.
Lower prices at the pump should warm the hearts of the 42 million Americans expected to take a road trip of 50 miles or more this July 4, which falls on Monday. Unfortunately, one reason oil and gas prices are dropping is due to falling demand amid fears of a global recession. AAA noted that the price of oil dropped to around $107 per barrel earlier this week from $110 last week.
“Fear is not a good reason to move a market like the one for oil, but it is a powerful motivator,” AAA spokesperson Andrew Gross said in statement. “The cost of oil accounts for nearly $3 for every $4.89 at the gas pump. Consumers should find more relief when fueling up if oil prices drop further.”
Gas prices could sink even further over the next few days. As previously reported by GOBankingRates, they could dip as low as $4.75 a gallon on July 4, according to a recent prediction from Patrick De Haan, GasBuddy’s head of petroleum analysis.
The wild card is how unforeseen events might impact gas prices over the near term. As CBS News reported, any abrupt changes to supply — such as a slowdown in production caused by severe summer weather — could quickly reverse the downward trend.
“Risk remains that when the peak of hurricane season arrives, we could see a super spike at the pump,” De Haan said in a statement.
More From GOBankingRates