TOWSON, MD (July 2, 2018) – Gas prices are at their highest point for an Independence Day holiday in four years, but that will not deter the record-breaking number of travelers nationwide and in Maryland who will take to the roads.  

For the nearly 40 million motorists nationwide expected to travel this week, they will find prices at the pump nationwide at 11 cents, on average, cheaper than this past Memorial Day holiday. For the nearly 863,000 Marylanders traveling by auto, the state average is 19 cents less than Memorial’s Day price. 

“Despite the busy summer travel season, gas prices nationwide and in Maryland have been trending downward since Memorial Day, thanks to supply keeping up with demand and cheaper crude oil prices,” said Christine Sarames Delise, a spokeswoman for AAA Mid-Atlantic. “However, the recent elevation of the price of crude and other geopolitical concerns could tilt gas prices in the other direction in the weeks ahead, even with an expected increase in global crude production from OPEC and its partners.”  

Today’s national gas price average is $2.86 per gallon, which is one cent more than last week, but nine cents less than a month ago and 63 cents higher than this time last year. 

Maryland’s average is six cents lower than the national average at $2.80 per gallon, which is a penny less than last week and 14 cents lower from last month, but 59 cents more than last year on this date.

While the state average price remains cheaper than last week, some metro areas across the state are experiencing weekly cost increases at the pump, notably Cumberland, Hagerstown, and Salisbury.

AAA is tracking the following factors that will continue to impact pump prices for the remainder of the summer into the fall:

• Domestic crude inventories: For the first summer driving season in five years, the U.S. has seen the largest one-week reduction (9.9 million barrels) in crude inventories, according to the latest Energy Information Administration (EIA) weekly report. A consistent decline in supplies could spark higher gas prices.

• Crude production and exports: Refinery runs are at an all-time high and exports are at record levels, which impact supply levels.

• Gasoline demand and inventories: The latest EIA weekly data also shows U.S. demand at 9.7 million barrels per day, one of the highest levels of the year, and could hit a new record with Independence Day holiday travel. Gasoline inventories nationwide and for the East Coast increased from the previous week. East Coast inventories are at the highest level since June 2017.

• Crude oil prices: Last week, crude oil hit $74 per barrel – the highest price for the commodity since 2014.

• Geopolitical concerns: Market observers are watching crude production levels in Libya and Venezuela amid economic woes in Venezuela, and details on the Iran sanctions all of which are influencing market prices.

“If gasoline demand remains strong, domestic and global oil supply decline, and the price of crude oil continues to trade above $70 per barrel, motorists may see gas prices potentially jump back up to nearly $3.00 per gallon in the coming months,” added Delise.

                                   CURRENT AND PAST GAS PRICE AVERAGES 

                                                      Regular Unleaded Gasoline 

Oil Market Dynamics

At the close of NYMEX trading on Friday, June 29, West Texas Intermediate (WTI) settled at $74.15 per barrel, an increase of $5.57 from the previous week’s close. Crude prices reached new highs not seen since 2014 following a number of developments that could affect supply in the coming months, which include:

• OPEC confirming that it will work with its partners to produce a record-high 11 million barrels per day of crude in July;

• The U.S. seeking greater crude oil sanctions on Iran;

• The continuing economic crisis in Venezuela.

Moreover, crude prices spiked this week after EIA's weekly report revealed that for the first summer driving season in five years, the U.S. has seen the largest one-week reduction (9.9 million barrels) in domestic crude inventories.

Crude inventories now sit at 416.6 million barrels. When compared to this time last year, total crude inventories around the country are lower by 92.6 million barrels. The market will watch supply and demand closely in July for indicators that increased crude production from OPEC and its partners has helped to meet growing global crude demand. If it appears that supply remains tight amid high demand, prices may continue to climb. 

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AAA provides automotive, travel and insurance services to 57 million members nationwide and more than 937,000 members in Maryland.  AAA advocates for the safety and mobility of its members and has been committed to outstanding road service for more than 100 years.  The not-for-profit, fully tax-paying member organization works on behalf of motorists, who can now map a route, find local gas prices, discover discounts, book a hotel and track their roadside assistance service with the AAA Mobile app for iPhone, iPad and Android.  For more information, visit AAA.com.