Summer driving season is in full swing, but prices at the pump this year continue to show little in the way of excess demand for gas to fill up the tank. According to AAA, the national average price of a gallon of gas stands at $2.29, and so far in June alone, the average price is down over 3%. Year to date, prices are down nearly 2%. Going back to 2005, there has never been a year where the national average price of gasoline was down on a year to date basis at this point in the year, and there have only been three other years where prices were up less than 10%. With an average YTD gain of 22.2% (median: 18.5%), prices in 2017 have been considerably weaker than they have been in prior years.
What makes this year’s weakness even more noteworthy for this point in the year is that we are currently at the time of year when prices have historically been at their highs for the year. The chart below compares the average price of gasoline so far in 2017 to a composite showing the average YTD change for each point in the year going back to 2005. Based on the historical pattern of gasoline, if prices couldn’t get a lift in the first half of 2017, they could be in for tough sledding in the second half of the year.
On a year/year basis, after an eight-month stretch where gas prices were showing increases, they just moved back into negative territory again in June with a decline of 1.8% y/y. As recently as February, however, the y/y change was well in excess of 30%. Back then everyone seemed to be worrying about a pickup in inflation, but today as low base effects of commodity prices wears off on y/y readings, those fears seem like a distant memory.