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Washington, D.C. – AAA says Americans are changing their perception of what they consider “too expensive” when it comes to filling-up at the pump. AAA’s 2019 Gas Price survey found that 50 percent of consumers think paying $3.00/gallon is too high – an increase of 30-cents from last year when half of consumers reported $2.70 as too expensive.
2019’s price point is also 50 cents more than in 2016, when half of consumers thought $2.50 was too much to pay at the pump.
With gas price sensitivity lowering over the past three years, Americans are feeling numb to the pain at the pump.
Price at which 50% of consumers consider gas price to be too high (2016 – 2019), per AAA’s Annual Gas Price.
“For consumers today, paying more to fill-up their gas tank may feel less shocking due to the national average pushing within pennies of $3.00/gallon the last two spring seasons,” said Jeanette Casselano, AAA spokesperson.
“However, there is good news for consumers this summer – the highest prices of the year could be in the rearview mirror. With most refineries operating at normal levels, demand at robust rates, and cheaper crude oil prices, summer gas prices are poised to be a little less than last year –dropping as much as a dime to lower the national average to $2.70,” Casselano stated.
Even with Americans being more tolerant of higher gas prices, you can still expect 74% of Americans to make lifestyle changes to offset increased pump prices. Of those, nearly a quarter (24 percent) say $2.75 – a price consumers will see for sure at the pump this summer — as the price that would push them toward changing habits or choices, including:
Crude + Demand Factors
This year, the most expensive West Texas Intermediate (WTI) crude oil prices, which AAA tracks to understand impact on pump prices, have ranged between $65.00 and $66.00/bbl.
Historically, crude oil prices and domestic gasoline demand have determined the price Americans pay at the pump in the summer months. And, that’s no different this summer.
OPEC extending its agreement will also likely lead to increased crude prices that would increase the price of gasoline around the world. It could also entice U.S. crude producers to export more crude, which could tighten supplies in the U.S. and raise retail prices at home. OPEC and its partners will meet on June 25th and 26th in Vienna, where they are expected to announce if the agreement will remain in effect.
Moreover, the added threat of a major hurricane making landfall could also impact demand, which could suppress pump prices.
In its 2019 Atlantic hurricane season outlook, the National Oceanic and Atmospheric Administration’s Climate Prediction Center said that warmer-than-average sea-surface temperatures in the tropical Atlantic Ocean and Caribbean Sea, ongoing El Niño conditions, and an enhanced West African monsoon could produce nine to 15 named storms – including four to eight hurricanes and two to four major hurricanes.
“The price of crude is a driving factor when it comes to retail gasoline prices, accounting for nearly 60% of the price motorists see at the pump year-round. While crude prices have been cheaper this year, AAA is monitoring a number of circumstances that could cause crude oil market prices to increase. This includes reductions in global and domestic crude supply, exports, and U.S. gasoline demand.”
As Americans settle into summer, many outliers could pave the way for unexpected price bumps, so stayed tuned. Motorists can always find the latest national and state gas price averages and trends at GasPrices.AAA.com.
AAA provides more than 59 million members with automotive, travel, insurance and financial services through its federation of 34 motor clubs and nearly 1,100 branch offices across North America. Since 1902, the not-for-profit, fully tax-paying AAA has been a leader and advocate for safe mobility.
TopicsAAA, Crude Oil, El Niño, Gas Prices, Hurricane, Jeanette Casselano, National Oceanic and Atmospheric Administration, NOAA, OPEC, Organization of the Petroleum Exporting Countries, Russia, Vienna Austria, Washington D.C., West Texas Intermediate, WTI
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