The number of Americans traveling by car for the Fourth of July holiday will hit a record high this year, fueled by a growing economy and relatively low gasoline prices, the nation’s largest motorists’ advocacy group said on Thursday.
The forecast for strong driving numbers will be welcomed by U.S. refiners, which are banking on summer driving season to draw down high product inventories and resurrect margins from seasonal lows. Oil prices have sagged in recent weeks because of a glut of supply worldwide, and refiners have also been hurt by heavy gasoline inventories.
That has pushed gasoline prices lower, which could boost driving activity. The American Automobile Association projects a record 37.5 million people will drive 50 miles or more from home during the holiday period that stretches from June 30 to July 4.
That would break last year’s record of 36.5 million, and mark a fourth consecutive year of increased motor travel for the Independence Day holiday, AAA said.
Driving activity in the United States is closely watched since the country accounts for about 10% of global gasoline demand.
The average U.S. price for regular gasoline was $2.28 per gallon on Wednesday, down slightly from $2.32 a year ago, according to AAA. Average weekly prices have fallen by roughly 5% since the end of May, according to the U.S. Energy Information Administration.
“It’s almost a shock that we’re seeing lower oil prices in the summer than the winter,” said Patrick DeHaan, petroleum analyst at Gasbuddy.
“Anecdotally, the lower gas prices go, the more people are gonna make those spontaneous trips. There’s more stations under $2 a gallon today than there were in winter.”
U.S. gasoline demand has rebounded in the past month after a slow start to the year, with two of the past five weeks recording the highest demand numbers on record.
Motorists logged 1.2% more miles on U.S. roads and highways in April compared with the same month last year, according to U.S. government data released on Tuesday, putting drivers on pace to break last year’s record volumes.
U.S. vehicle miles traveled were up 1.5% year-over-year through the first four months of 2017.
Despite the strong driving figures, U.S. gasoline demand was down 2.7% from a year ago for the first three months of the year, according to the U.S. Energy Information Administration.