As Labor Day weekend nears, summer vacationers are expected to see the cheapest pump prices in three years as international crude oil prices continue to slide on international trade concerns, according to AAA.
In Arkansas, Labor Day motorists will see some of the lowest gas prices in the nation heading into the fall as the seasonal demand for high-grade gasoline wanes and refiners switch over to winter-blend fuels. Although prices often tend to see a temporary bump heading into the official Labor Day holiday – which begins on Wednesday and runs through Tuesday, Sept. 3 – the national average has dropped two cents in the past week and is 24 cents cheaper than a year ago.
“For Americans who bookend summer with road trips, they will find gas prices this coming weekend that are cheaper than this past Memorial Day and last year’s Labor Day holiday,” said Jeanette Casselano, AAA spokesperson. “At the start of the week, two-thirds of all states have gas price averages that are nearly a quarter cheaper than last year.”
Patrick DeHaan, head of petroleum analysis for GasBuddy, said the national average price of gasoline has declined for the sixth straight week after last week’s escalation in the trade battle between the U.S. and China.
“It’s possible that the streak continues longer than previously anticipated as oil markets react to the news, sending oil lower,” said DeHaan. “With Labor Day around the corner, motorists will see the cheapest end to the summer since 2016, a great send-off to wrap up the summer driving season, but more good news likely lay ahead for motorists.”
“Gas prices will likely decline even more substantially starting in mid-September as most of the nation begins the transition back to cheaper winter gasoline starting Sept. 16,” DeHaan added. “Fall will bring plenty of falling gas prices, so long as there remains turmoil between the U.S. and China.”
GASOLINE STOCKPILES AT ALL-TIME HIGH
At $2.59 per gallon, the national average price for regular unleaded gasoline is already 15 cents cheaper than just five weeks ago and is poised to continue falling after the post back-to-school holiday. AAA forecasts the national average to drop to $2.40 or lower this fall, mainly due to crude oil expectations in the range between $50 and $60 per barrel.
In its weekly petroleum status report, the U.S. Energy Information Administration (EIA) reported that U.S. crude oil refinery inputs averaged 17.7 million barrels per day during the week ended Aug. 16, which was 401,000 barrels per day more than the previous week’s average. Refineries operated at 95.9% of their operable capacity last week.
Coming off a new all-time record of 9.93 million barrels per day for the week ending Aug. 9, gasoline stockpiles decreased last week slightly to 9.9 million barrels per day. Distillate fuel production increased last week, averaging 5.3 million barrels per day.
U.S. crude oil imports averaged 7.2 million barrels per day last week, down by 497,000 barrels per day from the previous week. Over the past four weeks, crude oil imports averaged about 7.2 million barrels per day, 10.8% less than the same four-week period last year, the EIA said. Total motor gasoline imports last week averaged 892,000 barrels per day, and distillate fuel imports averaged 210,000 barrels per day.
The price for West Texas Intermediate, the nation’s premium light, sweet crude, was $54.83 per barrel on Aug. 16, 2019, 42 cents above last week’s price, but $11.10 less than a year ago. The spot price for conventional gasoline in the New York Harbor was $1.659 per gallon, 20 cents less than last week’s price and 35 cents lower than a year ago. The spot price for ultra-low sulfur diesel fuel in the New York Harbor was $1.81 per gallon, 13 cents above last week’s price but 29 cents under a year ago.
Despite the traditionally pre-Labor Day pump price run-up, most gas stations in Arkansas are still posting prices well below the $2.30 a gallon level. Only Alabama and South Carolina at $2.23 per gallon, and Louisiana and Mississippi at $2.20 per gallon for regular unleaded, have lower pump prices than Arkansas.
HOT SPRINGS SEES LOWEST PUMP PRICE
According to AAA’s daily fuel gauge, motorists in or driving through Arkansas are paying an average of $2.27 per gallon to fill up their tanks. That is about two cents cheaper than a week ago and 30 cents lower than a year ago. Pump prices in the state’s metropolitan areas range from a low of $2.15 in Hot Springs to a high of $2.33 for residents and motorists filling up in West Memphis near the Arkansas-Tennessee state line.
Motorists in the Jonesboro and Texarkana area are paying about $2.20 per gallon, while Fayetteville-Springdale Rogers, Fort Smith and the Little Rock-North Little Rock, the state’s three largest metropolitan areas, are seeing average prices between $2.24-$2.26 per gallon. Travelers in the Pine Bluff area pay about two cents more at $2.29 per gallon to fill up their tanks.
Drivers choosing to fill up the tanks with a higher-grade of gasoline should expect to pay an average premium of $2.83 a gallon across the state. Big rig drivers and other diesel fuel users will see pump prices at about $2.89 a gallon, down 16 cents from a year ago.
According to GasBuddy.com, several areas across the state are still seeing prices below the $2.05 a gallon level and as high as $2.45 per. In the Jonesboro area, several stations in the Northeast Arkansas city are caught in a price war that has driven two locations below $2.
TAKING TO THE SKIES
With those lower fuel prices, travel industry experts expect the roads, rails, waterways and airlines to be extremely busy over the holiday weekend. Although AAA stopped measuring the number of people it expects to hit the road at the end of the U.S. vacation season in 2015, Arkansas Highway Department and other transportation agencies across the U.S. are issuing construction zone and other safety warnings on possible traffic tie-ups ahead of the long holiday.
Meanwhile, Airlines for America (A4A), the industry trade organization for the leading U.S. airlines, expects a record 17.5 million passengers to travel on U.S. airlines worldwide during the week-long Labor Day travel period. That represents a 4% increase from the 16.9 million passengers estimated to have flown during the same holiday period last year.
“With fares at historic lows and customer satisfaction at historic highs, travelers continue to take to the skies in record numbers,” said A4A Vice President and Chief Economist John Heimlich.
A4A is projecting U.S. airlines to carry an average of 2.51 million passengers per day during the week-long travel period. Friday, Aug. 30, is expected to be the busiest day of the period, with 2.98 million passengers flying aboard U.S. carriers, followed by Thursday, Aug. 29, with 2.82 million passengers, and Labor Day itself, Monday, Sept. 2, with 2.71 million passengers.
Even as U.S. airlines cope with the reduction of more than 300 daily flights due to the grounding of the 737 MAX, they are adding 109,000 seats per day to their schedules to accommodate the additional 95,000 daily passengers expected during the Labor Day travel period, officials said.