Gas Prices Contine Upward Trend In Advance Of Thanksgiving Holiday Weekend

Gas prices continued their ascent this week, despite retreating crude oil prices, leaving motorists to wonder if the trend will continue as the Thanksgiving holiday travel weekend approaches. The national average price of regular grade gasoline was $2.88 Friday, down a penny from earlier in the week and on par with last week’s price, up 8 cents this month and 24 cents above year-ago prices. Yet, for the 27th consecutive week gas prices have remained below $2.90 and they remain $1.23 below record highs seen during summer 2008.
Although nearly 40 million people will be hitting the highways next week, it is not just the upcoming Thanksgiving travel season that is spurring an increase in pump prices, as some believe. Blame it on U.S. gasoline and diesel demand, which have been in the recovery mode since September. The modest month-to-moth increase in demand is indicative of “continued economy recovery, although on a small scale,” and renewed consumer confidence, according to the American Petroleum Institute (API).
After posting 2010 highs of just under $88 a barrel last week, crude oil was down for most of this week. A stronger U.S. dollar, in addition to international concerns about China increasing interest rates to curb growth and worries over the solvency of Ireland’s debt which could lead to another European financial crisis, pushed crude oil down. By week’s end, crude closed at $81.65.
In its weekly report, the U.S. Energy Information Administration (EIA) announced crude oil stocks dropped 7.3 million barrels to 357.6 million barrels, likely due to year-end inventory management for tax purposes making large draws more common this time if year. Gasoline stocks dropped 2.7 million barrels to 207.6 million barrels. Gasoline demand saw a pullback of 100,000 barrels per day (bpd) to 8.952 million bpd, however, the four-week average versus last year still shows 1.8 percent growth.
The Weekend
“Despite recent increases at the gas pumps, the automobile remains the dominant mode of transportation for the upcoming Thanksgiving holiday weekend,” said Tracy Noble, spokesperson for AAA Mid-Atlantic. “AAA is projecting 94 percent of Thanksgiving holiday travelers or 39.7 million people (up 12 percent over last year) will travel by car to be with family and friends. We encourage all holiday travelers to be safe and pack their patience as the holiday season gets underway.”
The Week Ahead
AAA estimates that 42.2 million Americans will travel 50 miles or more away from home over the Thanksgiving holiday weekend; an 11.4 percent increase over last year. The 2010 Thanksgiving holiday travel period is defined as Wednesday, November 24 to Sunday, November 28. Travel by automobile remains the dominant mode of transportation, despite recent gas price increases. Ninety-four percent or 39.7 million holiday travelers plan to go by car, up 12 percent over last year. Four percent or 1.62 million holiday travelers plan to go by air, an increase of 3.5 percent over 2009.

CURRENT AND PAST GAS PRICE AVERAGES

Regular Unleaded Gasoline (*indicates record high)