Labor Day 2024: What to expect for gas prices before you hit the road
Gas prices this Labor Day are roughly 50 cents lower than they were a year ago, providing some relief to drivers who will hit the road for the long weekend.
This year, AAA projected that domestic travel is up 9% compared to last year. As of Friday, the national average for a regular gallon of gasoline was $3.35, which is down 15 cents from a week ago, according to AAA's latest estimates.
It's a far cry from when prices hit a record of over $5 per gallon in June 2022. Gas prices have either remained flat or fallen since the end of July, according to AAA data.
"Things are definitely moving in the right direction. So, folks will have a lot of savings on the road if they take a trip this Labor Day weekend," AAA spokesperson Andy Gross told FOX Business.
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West Texas Intermediate is sitting around the low to mid 70 cents per barrel of oil, which has been keeping pressure off gas prices, according to Gross. He noted that oil accounts for about 50% to 60% of what you pay at the pump.
However, a significant factor that impacts oil prices is hurricane season.
AAA previously warned that hurricanes hitting the Gulf and affecting regional refineries could cause gas prices to go up as the peak of hurricane season approaches in September.
Gross said that this year's hurricane season has been weird because despite all the hot water and storms forming, "they have not jeopardized Gulf oil production or Gulf oil refining yet."
There are still about four to six weeks left of the season, and if a storm enters the Gulf, the oil markets will react negatively.
The oil market "doesn't like volatility, and a storm represents volatility," according to Gross.
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He added that the oil market is just as risk-averse as the stock market, "and a little bad news can send it in a spiral."
If the Gulf region can make it through the middle of October without a major storm forming, then the chances of a storm coming before the end of the season, while not zero, are a lot less, according to Gross.
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Around this time of year, refineries will also start switching to the winter blend gasoline, which is cheaper to produce.
"That really helps start off an acceleration in declining gasoline prices," he said.