Drivers looking to travel for the holiday may have noticed unusually low gas prices over the Fourth of July weekend.
Gas prices were the lowest average they have been since 2005 for Independence Day nationwide, according to GasBuddy, a company that keeps an eye on prices around the nation.
“A lot of the reason is that the last couple of months we have seen an increase in U.S. oil production,” Patrick DeHaan, GasBuddy senior petroleum analyst, said. “(Organization of the Petroleum Exporting Countries), which expected to cut production again when it met in May, they didn’t cut production and since that meeting in late May oil prices have really started to sink on the concern that there’s too much oil and nobody’s cutting back.”
The nationwide average was $2.21 per gallon, according to GasBuddy. Nationwide prices on the Fourth of July have declined the past four years, going from $3.66 in 2014, $2.77 in 2015, $2.27 in 2016 and now $2.21. Currently, the average in Tennessee is $1.99.
“I think it’s fairly unique, especially when you look at gas prices being lower this time of year when we’re using more expensive summer gasoline when demand is supposedly higher than when it is to start the year,” DeHaan said. “It really defies fundamentals. Usually supply and demand would lead to higher prices in the summer, lower prices in the winter, just because of demand and, like I said, the price of summer gasoline taken into consideration. So it’s fairly unusual to see the kind of inversion that we’re seeing.”
Prices will eventually start to increase again, but DeHaan said drivers should not expect them to be much higher than what has already been seen this year.
“Gas prices, oil prices ... it’s just a matter of time before we see some sort of rebound,” DeHaan said. “I don’t think that the rebound will be major. I mean oil prices have been stuck between $43 and $53 a barrel for the entire year.”
Traditionally prices bottom out around January or February and hit a peak in May, DeHaan said.
Eddie Simpson, co-owner of Bimbo’s near Interstate 75, said he was “pleasantly surprised” that prices were as low as they were, especially since the 4-cent gas tax went into effect July 1.
While customer traffic remains heavy partially because of the interstate, Simpson said he has noticed this business being “a little bit” higher recently. Much of that could be credited to lower gas prices, which he said might encourage more frequent travel.
The lowest gas price in Loudon County on Monday was $1.82 from Murphy USA, Ingles Gas Express and Marathon, all off Highway 321, according to GasBuddy.
“Our gas sales has been up a little bit every month this year because of the traveling and I don’t see that this month will be an exception and even into July,” Simpson said. “I think a lot of people’s going to be traveling, and it does boost business a little bit. Volumes of gas means that people come inside the store and that’s what it’s all about right there. Gas is always just a wash, just kind of a draw, and it helps to be able to get more people there and get them to stop where they come in there and buy some other products along with the gas.”