Business

Cheapest fuel in a decade drives US holiday weekend

Driver in US Image copyright Getty Images
Image caption 38 million Americans are expected to drive this weekend taking advantage of the low oil prices.

American drivers take to the roads this holiday weekend enjoying the lowest fuel prices for a decade.

On Friday, the average price of a US gallon of petrol (3.7 litres) was $2.31 (£1.58) - 40 cents lower than the same time last year.

Although oil prices are beginning to rise, briefly going above $50 a barrel on Thursday, fuel remains cheap.

As many as 38 million Americans are expected to drive over the Memorial Day long weekend.

Monday's holiday is considered the unofficial start to the summer season.

The number of drivers on the road is expected to be the highest since 2005.

A survey by the American Automobile Association (AAA) found 55% of drivers said they were more likely to take a trip due to the low fuel prices.

"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," said AAA's chief executive Marshall Doney.

Image copyright Getty Images

On Friday, the price of West Texas Intermediate crude - the US oil benchmark - was $49.24 a barrel.

The price of oil has risen over the past month as some global suppliers have cut their output and Canadian producers have been temporarily forced to halt production due to wildfires.

This has offset new oil production from Iran hitting the global market.

US oil production has fallen and some oil boomtowns in North Dakota and Texas have seen sharp declines in their local economies. The number of US oil rigs has fallen by 80% in the past two years.

Across the US, Mississippi has the lowest gas prices at $2.08 a gallon, with Texas and South Carolina not much higher.

Image copyright AAA

California has the highest prices for gasoline in the US at $2.80, but even that figure was still $1 lower than a year earlier.

Top destinations

US drivers will travel an average of 50 miles (80km) from their homes.

The AAA survey found Orlando, Florida, and Myrtle Beach, South Carolina, as well as Washington DC were top destination for travellers over the long weekend.

The number of US drivers has risen as the economy has improved.

Many Americans have looked at low fuel prices, along with falling unemployment, slowly rising wages and easy access to credit as reasons to buy a car.

Last year about 17.5 million vehicles were sold in the US.

More on this story