- November 6, 2023
- Posted by General Electric Credit Union
- 5 read
Rising Gas Prices During the Holiday Travel Season
Oil prices have increased more than 30% since late June.1 As usual, gasoline prices have followed suit. On September 27th, the national average price for a gallon of unleaded gas was $3.83, up from $3.75 a year earlier.2 Below are some market dynamics that have impacted fuel prices in recent months and how you, the consumer, can save money at the pump during the holiday travel season.
Tight oil supplies
Oil prices are sensitive to shifts in the delicate balance between supply and demand in the global market. Much of the third quarter's increase has been attributed to a combination of record-high global demand and coordinated supply cuts.3 On September 5th, Saudi Arabia and Russia announced the extension of voluntary production cuts (1.3 million barrels per day combined) through the end of 2023. These cuts, which began in June, are on top of cuts that were previously put in place through 2024 by the Organization of the Petroleum Exporting Countries (OPEC), along with Russia and other allied oil producers (dubbed OPEC+). In total, supply cuts are expected to reduce global crude inventories by 3.3 million barrels per day in Q4 2023.4
Extended periods of high oil prices have been blamed for bringing on recessions in the past, and low prices have sometimes provided an economic boost. But this relationship has become more complex as the United States has expanded its presence in the global oil market. In fact, U.S. oil production has more than doubled since 2011. The United States has been the top oil-producing nation since 2018 and was responsible for 20% of the world's total in 2022. Saudi Arabia and Russia followed behind with 12% and 11%, respectively.5
But more U.S. production is not guaranteed. With oil prices sitting above $100 per barrel for much of 2022, companies were reluctant to invest in drilling.6 In recent weeks, U.S. producers have reportedly added drilling rigs in the shale oil patch at the fastest rate since November of 2022, but it's still unknown whether U.S. production will increase enough to lower prices.7
Pain at the pump
Now that it’s October, you may be making travel plans for the holiday season. If you’re driving to your destination, factoring in these increased fuel prices will help you budget more accurately. Use an online calculator, like GasBuddy, to get an idea of what you’ll spend at the pump.
Then, enlist the following tips to reduce the financial impact of filling up your tank:
- Embrace gas rewards. Many gas stations have free reward programs that give you a few cents back per gallon. Choose a program at a gas station chain you frequent to get the most value.
- Get the most out of discounts. Some gas stations have limits on the number of gallons you can get at a discount. If you have multiple drivers in your household, consider visiting the pump at the same time and filling up both cars under the same transaction. This will allow you to get the full value of the discount.
- Use a credit card. The best credit cards allow you to earn cash back or rack up points for purchases at the pump. This helps you recoup some of the cost of transportation.
- Find the best price. Certain apps, like GasBuddy and Gas Guru, are designed to help you find the lowest price gas in your area. Plan your route to hit these stations so you can fill up for less.
General Electric Credit Union (GECU) has a full suite of credit cards for use at the pump and beyond. Earn unlimited cash back with our Gold card.8 Or, earn 2x the points on gas with our Visa Signature®9 or Platinum cards.10 Learn more or apply for your card online in minutes.