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Memorial Day gas prices remain stubbornly high

AAA estimates that 43 million people will be traveling this weekend, with 37 million people on the road even though gas prices are up 30 cents per gallon.

Posted: May 23, 2019 4:29 PM


For much of the country, gas prices will be lower this Memorial Day weekend than they were a year ago. But they are still a long way from being cheap.

Although the national average of $2.85 a gallon is about dime cheaper than a year ago, gas is still significantly more expensive than every other Memorial Day since 2014.

A strong US economy has increased demand for gasoline. With unemployment near a 50-year low, there more people are commuting and taking vacations.

AAA estimates that a record 37.6 million people will be on the roads in the United States this weekend, the traditional start of the summer driving season. That's up 3.5% from last year.

In western states, drivers will find the highest gas prices in the country.

The statewide average in California is $4.03 for a gallon of regular, about 30 cents higher than a year ago. Every other state west of the Rockies is paying $3 a gallon, more than they were a year ago.

Pennsylvania is the only state east of the Rockies with a statewide average above $3 a gallon.

The price differences between states exists because of varying refining capacity, according to Tom Kloza, chief oil analyst for the Oil Price Information Service.

About 2.5 million barrels of daily refining capacity has been built in the United States over the past 20 years, all of it east of the Rockies.

But the western United States hasn't gotten any new capacity. Tighter environmental regulations in Washington and California have blocked new refineries, for example. That's a problem, because the West's population continues to grow.

And several major western refineries are down for maintenance heading into the holiday weekend.

"Most should be back to full speed in June but the West Coast has no room for occasional fires, power outages, etc.," he said.

Oil prices have dipped recently on worries about a global trade war cutting into economic activity and demand for oil. Wholesale prices of gasoline have also fallen this week, but that has yet to be seen at the pump said Kloza.

There could be some relief for drivers early next week, but he said prices will probably stay relatively high throughout the summer because of other issues that have been pushing crude oil prices higher in recent months.

Those pressures include decreased output by OPEC, sanctions on Iran and Venezuela and continued economic strength in the United States.

"The trade war worries are the only thing pushing oil down," Kloza said. "If that causes a recession, that changes the equation, but otherwise I think crude prices should stay high."

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Tippecanoe807627
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