U.S. Motorists Undeterred by High Gas Prices, Ready to Travel for Memorial Day – Reuters

By Stephanie Kelly and Arathy Somasekhar

NEW YORK – The upcoming Memorial Day weekend is set to be the busiest in two years for U.S. travel, as more Americans venture onto the roads, shaking off the effects of pandemic lockdowns, even amidst high fuel prices.

This busy travel weekend marks the beginning of the summer driving season in the U.S., and it may reveal how much consumers are willing to handle rising fuel costs. In the first three months of the year, the number of miles driven has increased by 5.6%, despite a 50% rise in the average price of a gallon of regular gasoline, now nearing $4.60 nationally, according to the American Automobile Association.

"Americans seem to be largely undeterred by high prices," noted Patrick De Haan, head of petroleum analysis at a price tracking service, who warned that prices could exceed $5 per gallon soon. Currently, ten states and the District of Columbia are already experiencing prices above $5, with California seeing averages over $6.

Approximately 39 million people are expected to travel 50 miles or more by car this Memorial Day weekend, which reflects an increase of 8.3% from last year and approaches pre-pandemic levels, as reported by the American Automobile Association.

In Barnstable, Massachusetts, Dean DeLaHaye and his wife Brigitte are gearing up for a 250-mile round trip to visit relatives in New Hampshire. "Most people are tired of being stuck at home during the pandemic," DeLaHaye said, adding that the high fuel prices have not deterred them from traveling. "I’m going to drive."

The surge in gasoline prices can be attributed to rising demand and tight energy supplies, exacerbated by refinery closures and reduced imports following geopolitical tensions, including Russia’s invasion of Ukraine. U.S. gasoline inventories have plummeted for seven consecutive weeks, currently at their lowest since December, according to data from the U.S. Energy Information Administration.

Increased U.S. gasoline exports are also contributing to the rising prices by depleting domestic inventories. Demand from Europe and South America has U.S. motorists competing for fuel with consumers globally, as noted by a commodities investment firm expert.

If high export levels continue and refinery operations remain near maximum capacity, analysts predict retail gasoline prices could potentially rise to $6 per gallon or even higher.

Gasoline consumption is projected to reach 9.12 million barrels per day this month, peaking at 9.31 million barrels per day in July, based on EIA data. Instead of reducing their driving, consumers are more likely to find savings in other areas, such as cutting back on dining out, according to AAA spokesperson Devin Gladden.