Gas Prices thru 062916According to AAA, 46 million Americans will either hop in a car, plane, train, or boat this July 4th weekend, and while gas prices are up on the year, relative to prior July 4th weekends they haven’t been this low in over a decade.  The table to the right shows the YTD change for the national average price of a gallon of gas as of 6/29 along with the YTD change.  At a national average price of $2.294 per gallon, prices are up 14.9%.  While that’s the largest YTD change in five years, because prices are coming off such a low base the absolute price remains low.

The chart below shows a composite chart of the national average YTD change in price of a gallon of gas going back to 2005 compared to this year.  While this year started off on a weak note, beginning in February, prices started to follow their seasonal trend and rallied right through the beginning of June.  While prices were up nearly 20% on the year at one point, following the recent pullback the YTD gain has pulled back to less than 15%.  If the pattern continues to gold going forward, prices have likely peaked for the year and should trade in a sideways range for the remainder of the summer, and then start their seasonal decline after Labor Day weekend.

Gas Prices 2016 vs composite

The final chart we wanted to show is the y/y change in gasoline prices going back to 2006.  Even after the nearly 15% increase in prices at the pump this year, the national average price is still down over 17% y/y.  While the magnitude of the y/y decline has moderated recently, what is most noteworthy about this chart is the fact that prices have been down on a y/y basis for nearly two years now.  When you start compounding y/y declines, it really starts to add up!

Gas Prices YY change

 

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