More Travelers for the Labor Day Holiday is Good News to Many

The last major holiday of the summer is approaching, and many will be traveling to take in a few days’ vacation before fall appears. The American Automobile Association (AAA) is predicting an increase in the number of travelers leaving home and going at least 50 miles away to their destination by 9.9 percent over last year’s holiday. In 2009 31.3 million Americans traveled over the Labor Day holiday and this year the AAA is expecting 34.4 million to take to the roads and skies.

AAA expects that the national average price of automobile gasoline to be between $2.65 and $2.75 per gallon of self-serve regular gasoline during the holiday weekend. One year ago the national average was at $2.62 per gallon of regular unleaded gasoline. Crude oil was at $75.32 per barrel at market close Friday which is slightly higher than the price at the same time last year of $73 per barrel.

Tracy Noble, an AAA spokesperson said: “As motorists gear up for the final three-day weekend of summer, they have undoubtedly noticed the recent decline in gas prices. Prices at the pump have followed crude oil declines in recent weeks, dropping to their lowest point of the summer this weekend. AAA expects the national average gas price to be between $2.65 and $2.75 per gallon during the upcoming Labor Day holiday weekend.”

Falling crude oil prices that have occurred in the last few weeks have led to declining gas prices at the pump. When news of a savings in the cost of gasoline occurs more people tend to travel. The news that there will be more travelers for the holiday is no doubt good news to those in the travel industry who have found it to be a difficult year financially, especially after the loss of revenue in the coastal beach areas of the Gulf after the BP Oil Spill. It is not clear if perhaps that area will see a small rally in the close of the summer season as tourists flock to beach areas. The Gulf Coast area has benefitted from extensive media coverage calling to tourists to come back to the area. President Obama and his family also visited the area to add confidence to the tourists considering a trip there.

Friday’s national average price for regular unleaded grade self-serve gasoline which was at $2.68 is actually the lowest since the third week of February this year. It also is less than the all- time high of $4.11 which was seen in the summer of 2008.

The price of crude oil remained basically stable in the market for the last few weeks. It rallied slightly with the news of less people applying for job unemployment benefits. The continuing threat of a possible double dip recession, due basically to the every challenged housing market has left the U.S. economy less than confident for recovery in the near future.

U.S. oil and gasoline supplies are hovering above the average. Demand has been low so current inventories hare high. Which of course is another reason the report from AAA of an increase in travelers for the holidays is welcomed news to investors.

The U.S. Energy Department is expected to release revised supply numbers this week. Analysts have provided contrasting data expectations on the supply numbers, but most agree on the expectation of the barrel to reach into the upper $70s by the end of the year.