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While it’s nothing compared to what people in Texas and the Gulf Coast are going through, if you plan on traveling this coming Labor Day weekend, you can expect to pay up given Harvey’s impact on the nation’s energy infrastructure. As shown in the chart, the national price of a gallon of gas has increased by 3% in the last week to $2.40 per gallon and near its highest levels of the year.
While the increase in the chart above looks dramatic, prices this year have been subdued relative to other years. The table to the lower left shows the YTD change of the national average price of gasoline by year going back to 2005. Even after the recent increase, prices at the pump are up just 2.9% this year compared to an average increase of 20.2%. For each individual year since 2005, the only one that saw a smaller YTD increase at this point in the year was 2010. The lower right chart compares the daily change in gasoline prices this year (same chart as above) to a composite of the average YTD price change by day going back to 2005. While prices have recently rallied due to the hurricane, we are just about to enter the time of year where prices begin their seasonal descent. If that pattern holds this year, don’t be surprised to see average gas prices decline in 2017. If that were to happen, it would be the third annual decline in the last four years!
Even with the recent uptick in gasoline prices, consumers won’t be paying much more at the pump this Labor Day weekend than they did last year. As shown in the chart, prices this year are up 8.4% year/year, which is a relatively big increase compared to recent history, but from a longer term perspective, isn’t that far from the norm.