AAA Expects Record US Travel Over July 4 Weekend
June 22, 2022
AAA expects a record 42 million people in the US to take to the open road over the July 4th holiday weekend. If their projections are correct, 2022 would outpace 2019 when holiday travel was 41.5 million people. The outlook for this year comes despite the fact that gas prices are near $4.97 per gallon. It appears that demand will be strong despite these record high prices. But at some point, demand has to be impacted negatively from the continued high cost of fuel.
Rising interest rates are helping to increase recession fears and these concerns are pushing energy price lower to start out today. The news about recession is in a lot of headlines this morning putting these concerns front and center. Energy markets have no clear trend currently and are moving lower on these recession fears and higher on low inventories and limited spare capacity issues. The US dollar has also rebounded, and the rising dollar is putting downside pressure on energy as well.
President Biden will ask Congress to halt the federal gas tax and the diesel tax as well and he is also calling on states to halt state fuel taxes. This might give prices a very temporary pause, but this is a longer term bullish event if it does happen. There doesn’t appear to be enough congressional support for the idea to move forward at this point.
Chevron Chief executive, Michael Wirth, rebutted White House officials’ criticism of the oil industry over energy cost, saying bringing down fuel prices will require a change in approach by the government. The White House asked the CEOs of six oil companies including Chevron to a meeting this week to discuss ways to reduce high energy prices.
Vitol CEO, Russell Hardy, said more Russian crude oil and products will head to Asian markets in 2023 while Europe will turn more to the Middle East to buy diesel. He also said tight energy markets would persist until demand slows.