There’s a big reason people will remember this year’s Memorial Day and it won’t be a happy one.
Memorial Day brings with it the unofficial start of summer: vacations, barbecues, and driving.
With Americans more or less indifferent to any more variations of the coronavirus and chomping at the bit for a return to “normal,” plenty of folks are poised to hit the roads for the holiday.
But there’s a huge damper hanging over things that’s going to make this Memorial Day memorable in a not so pleasant way.
No surprise, it’s gasoline prices.
Everybody’s pretty used to the idea that gasoline prices go up in summer. There is, after all, usually a lot more demand.
But gasoline was on a long steady rise even before the onset of Russia’s invasion of Ukraine in February.
“In most months from mid-2020 through February 2022, petroleum consumption was more than petroleum production globally, leading to declining oil stocks and causing a steady increase in the price of crude oil and retail petroleum products,” the Energy Information Administration said in its summer fuels outlook this month.
Since then, of course, oil prices, and therefore gasoline prices, have soared, as less Russian oil is available on the world market.
“The ultimate price U.S. consumers pay for gasoline and diesel this summer will depend on the course of global oil supply and demand in the coming months, which are very uncertain,” the EIA added.
Whatever the price is, in nominal terms it’s at record levels. The AAA’s national average price per gallon of gasoline hit $4.60 on May 26, a day before the holiday weekend gets underway.
That’s well above where its been around Memorial Day this century, though there have been fluctuations over the years, based on data from the St. Louis Federal Reserve.
Adding to the pressure on prices, the EIA forecasts that “U.S. gasoline consumption will average 9.2 million barrels per day (b/d), up 0.8% from last summer.”
Over the entire second and third quarter periods the agency sees retail regular gas averaging $3.84 a gallon nationwide, vs. $3.06 in 2022. Of course that means gasoline will have to come down a lot later this year.