If you're on the road this holiday weekend, you'll notice — or maybe you already have — that gasoline prices are up. The national average is $2.97 a gallon for regular unleaded,according to AAA
. That's up 25 percent from the year-ago average of $2.37.AAA
says 15 states are averaging $3 a gallon or more. And if you're in California, you're seeing the worst of it — an average price of $3.72. In a couple of California counties, the average for a gallon of regular even breaks $4.
A quick rundown as to why:
- Demand and consumption are up: Strong consumer confidence and low unemployment right now mean people are driving more — and driving more less-efficient trucks and SUVs too. Some 36.6 million Americans will travel on this, the biggest driving weekend of the year, AAA says, and that's up 5 percent over last year.
- Crude is up: Brent crude oil influences gasoline prices. And it's up 50 percent from last year, at around $80 a barrel.
- Supply is down: OPEC and Russia have cranked back production, starting last year, to offset shale production in North America. So as demand is up, supply is down. "The Saudis are quite enjoying $80 prices," said Michael Tran, global energy strategist at RBC Capital Markets, to CNN.
- Iran deal is kaput: Crude prices are up $10 a barrel since President Trump backed away from the Iran nuclear deal. The market figures new sanctions against Iran will limit its oil output.
The good news? Prices generally drop back off a bit in summer after Memorial Day.
Drive safely this weekend.Related Video: