Highways will be a bit more crowded, according to AAA, which estimates more than 2.5 million people in the Mountain Region will travel 50 miles or more during the holiday weekend. That’s the highest volume for Labor Day travel since 2008.
The Labor Day pump relief is expected to continue into the fall as demand for gas declines following the holiday and as domestic refineries switch to cheaper winter-blend gasoline, according to GasBuddy, a Maryland-based organization that tracks prices nationwide.
“We expect to see stable prices from now through mid-September,” said GasBuddy chief oil analyst Tom Kloza. “Some more significant declines could come after Sept. 15, when the ‘recipe’ for gasoline changes in most states. By Veterans Day, we anticipate that much of the country could be looking at average prices below $3.25 per gallon, with thousands of stations under $3 per gallon.”
The average price for regular unleaded gas in New Mexico fell to $3.38 on Friday, or 6 cents less than the national average, according to AAA New Mexico Weekend Gas Watch. New Mexico’s price is down by 4 cents from last week and 8 cents from Labor Day weekend last year.
“New Mexico is doing very well,” AAA Texas/New Mexico representative Doug Shupe told the Journal. “Gas prices here are less than the national average and significantly below other states in the Mountain Region.”
In the state’s major metropolitan areas, gas prices were lowest in Albuquerque and Las Cruces as of Friday, at $3.34 per gallon. Sante Fe motorists were facing the state’s highest price at $3.40 per gallon.
A number of things have contributed to price declines during most of this summer.
First, domestic oil production is at record highs as modern hydraulic fracturing and horizontal drilling technologies open up new areas to production and reinvigorate aging U.S. oil fields, such as the Permian Basin in southeastern New Mexico and West Texas.
The country’s refineries also are running smoothly, without the maintenance-related disruptions that have plagued many refineries in past summers, said GasBuddy senior petroleum analyst Patrick DeHaan.
“Refinery glitches led to spikes in oil prices in the past couple of years but this summer we haven’t seen a lot of issues,” DeHaan said. “In addition, U.S. oil production is now rivaling Saudi Arabia, so there’s real downward pressure on prices as we become less reliant on foreign oil.”
Moreover, recent turmoil in the Middle East hasn’t affected international prices for crude as it has in the past, because fighting in places like Iraq and the Gaza Strip is not interrupting oil production or exports, DeHaan said. In fact, U.S. benchmark crude oil futures are down by nearly $9 per barrel since Memorial Day weekend.