Just in time for the 4th of July, gas prices are trending downward. AAA has the Texas statewide average now at $2.65 per gallon, down four cents from last week and continuing a four-week run of declines. The national average is now at $2.85 per gallon, but that is still down 12 cents from a month ago. However, the news isn't all positive. Prices are still about 60 cents higher than they were a year ago, and volatility in the world's crude oil market means uncertainty for pump prices in the months ahead.
The decline in recent weeks is not a shock to Patrick DeHaan, analyst with GasBuddy, who says gas prices usually peak around Memorial Day. "So to see gas prices going down in the month of June is not too much of a surprise, in fact it's fairly normal," he tells KTRH. "But with oil prices having surged in the last couple of days on account of OPEC increasing production by a smaller than expected amount, we could be facing higher gas prices in the weeks ahead."
Indeed, while U.S. oil production is at an all-time high, OPEC nations overseas have limited their output in recent years. They recently agreed to increase output, but only by a fraction of the amount they cut. That, combined with soaring demand due to summer travel season, helped push crude oil prices up about 13 percent just in the past week. "In the midst of a very strong economy in the U.S. and globally, we're faced with kind of a supply crunch," says DeHaan. "The way things are developing, we could see the national average take a run at three dollars a gallon, and in Houston we could see average prices reach 2-75 a gallon or higher."
In the meantime, drivers continue to live it up. AAA estimates a record 2.9 million Texans will drive to their July 4th destinations this year.