As Memorial Day travelers head out this weekend, their trips will be buoyed by record low gas prices.
The American Automobile Association announced Monday that gas prices are at an 11-year low, and AAA is expecting record holiday travel as a result.
Gas prices ticked up last week, but barely, marking a rise of 5.8 cents from the price seven days earlier, according to the U.S. Energy Information Agency, which tracks gasoline and diesel fuel pricing around the nation. A pre-Memorial Day spike is typical, however, and the EIA expects prices to dip again as summer goes on
to around $2.04 a gallon in a national average.
That figure would mark the lowest gas prices since 2004, the EIA said.
The average U.S. regular gasoline price this week was $2.30 a gallon with East Coast gas costs hitting $2.24 while West Coast gas prices were slightly higher at $2.65. U.S. gas prices rose the most in the Midwest, but the average cost per gallon was still below the national average at $2.28 in the region, the EIA reported.
"For the full-year 2016, EIA forecasts U.S. regular gasoline prices to average $1.94/gal. Based on this annual average price, EIA estimates the average household will spend about $350 less on gasoline in 2016 than in 2015 and about $1,000 less than in 2014, when retail gasoline prices averaged more than $3 per gallon," the EIA said of its projections.
About 38 million U.S. residents are expected to hit the roads during this weekend's holiday, AAA said in its annual Memorial Day forecast. That's the second highest projection ever for Memorial Day, the association noted, adding that "about 700,000 more people will travel compared to last year."
"The great American road trip is officially back thanks to low gas prices, and millions of people from coast to coast are ready to kick off summer with a Memorial Day getaway," AAA president and CEO Marshall Doney said in a statement.
Gas prices help to put vacationers on the roads, the AAA found in a consumer study. The group's most recent survey found that 55 percent of Americans said they'd be more likely to travel this year because of the savings on gas.
Air travel this holiday weekend is expected to rise just slightly — 1.6 percent over 2015 — but cruise, train and bus travel is expected to dip 2.3 percent this weekend, the AAA said.
Flights to 40 top destinations in the U.S. are 25 percent cheaper, the AAA said, adding that average daily rental car rates this weekend, $62, are down 3 percent from last year.
Orlando, Florida is expected to the be the nation's top Memorial Day destination this year, followed by Myrtle Beach, South Carolina, Washington, D.C., New York City and Miami, the AAA's research found, adding that travelers are focused on cities and warmer climates.
Gas prices are determined typically by four factors, according to the EIA. Those include: crude oil prices, wholesale margins, retail distribution costs, and taxes.
"Because the latter two are generally stable, movements in gasoline prices are primarily the result of changes in crude oil prices and wholesale margins. Each dollar per barrel of sustained price change in crude oil and/or gasoline wholesale margins results in a change of 2.4 cents/gal in product prices," the EIA said.
Adding to optimistic summer forecast, it said: "Gasoline production has been higher recently, and several of the severe refinery outages that caused high prices last summer, particularly on the West Coast, have since been resolved or accommodated by obtaining supply from other sources."
Travel is a boon to the economy. This weekend's road tripping should net about $12.5 billion in spending, an increase of 1.2 percent over 2015, the U.S.Travel Association said.
Air travelers will spend on average $990 each this holiday weekend while road trippers are expected to spend about $220 each on dining out, entertainment and lodging, the USTA added.
Expect increased security, longer lines at the airport and crowded highways, the group warned, calling attention to the nation's ongoing infrastructure woes.
“What we’re seeing is that the demand for travel is greater than ever — but that leads to the question of whether our transportation infrastructure is equipped to support that job-creating activity,” U.S. Travel president and CEO Roger Dow said in a statement Monday. “Unfortunately, the overwhelming body of evidence tells us the answer is no.”