Fourth of July holiday-makers will have to loosen their purse strings a little bit more as gas prices rise due to continuing conflict in Iraq.
Normally, gas price hikes tend to slow down during the Independence Day travel weekend. However, because of ongoing political unrest in Iraq, one of the major oil-producing countries in the world, the cost of gas will continue to go up to record-breaking levels since the peak prices during the Long Recession of 2008.
GasBuddy and the American Automobile Association (AAA) of various states have already posted their gas price reports, with the national average coming in at $3.69 per gallon on the week preceding the Fourth of July weekend and with likelihood to increase to $3.70 on the weekend itself. Relief won't come in fast, says GasBuddy, but Americans can expect to see a slight decrease in the national average to somewhere around $3.65 per gallon in a week or two following the holiday weekend.
West Coast states will be the hardest hit because of ongoing problems at oil refineries in the area. California, for instance, has a state average of $4.12 per gallon as of press time, while residents in Washington and Connecticut have to pay $4.00 and $3.98 per gallon of gas respectively. On the other hand, South Carolina has the lowest state average with $3.38 per gallon, a good 32 cents below the national average. Alabama and Mississippi follow with $3.43 per gallon, while Tennessee and Arkansas have $3.45 per gallon.
Mary M. Maguire of AAA Massachusetts explains that political unrest in the Middle East, where most of the world's biggest gas producers are found, creates a fear premium that leads distributors to think there's going to be an oil shortage.
However, there is no sign that gas prices will continue to rise beyond the summer. GasBuddy chief executive Tom Kloza says that domestic production of oil in the U.S. is at an all-time high since October 1986, which means the nation is not as dependent on Middle Eastern countries as it used to be. However, Iraq supplies some 2.6 million barrels of oil to the U.S. every day, and if the political situation persists, there is the potential to lose some of that oil.
Still, Kloza isn't worried about not meeting Fourth of July demands.
"Demand during the summer looks to be brisk, but it will be hard-pressed to match last year's consumption rate. Year-to-date, U.S. motor fuel demand has averaged about 365 million gallons per day, up about 1.7% from the same period in 2013," he says. "But lower demand looms through most of 2014 thanks to less driving by millennials and an increasingly more efficient light-vehicle fleet."