AAA forecasts higher holiday travel as motorists 'go over the mountains and through the woods'

Gas prices, crude oil prices continue decline

WASHINGTON — AAA forecasts 91.9 million Americans will travel 50 miles or more from home during the 2011-2012 year-end holiday travel season, a 1.4% increase over the 90.7 million people who traveled one year ago, the travel organization announced earlier this week. This year’s expected year-end holiday travel volume is the second-highest in the past decade and represents 30% of the total U.S. population.

The 11-day year-end holiday period is the longest holiday travel season of the year, affording many more Americans time to visit family or take vacations. AAA defines the year-end holiday travel season as Friday, Dec. 23, through Monday, Jan. 2.

Approximately 83.6 million people (91% of holiday travelers) plan to take to the nation’s roadways this year-end holiday travel season, a 2.1% increase compared with 2010-2011, when the number of auto travelers totaled 81.9 million. This year’s projected automobile travel volume is the second highest in the past decade and only 100,000 less than the 2006-2007 auto travel peak of 83.7 million. Automobile travel remains the preferred choice of transportation for 2011-2012 year-end holiday travelers as nearly 27% of the total U.S. population will hit the road.

The current national average price for regular unleaded gasoline is approximately $3.26 per gallon, about 29 cents more than one year ago. However, the national average price is about 72 cents less than this year’s peak price of $3.98 on May 5.

Economic improvements are continuing at a very slow pace, and consumer surveys show active concern and pessimism over that pace. The measure of economic activity, real gross domestic product, is expected to increase for the fourth quarter 2011 by 1.5% compared with the fourth quarter 2010.  While 1.5% growth is still slow, it is a slight increase over the expected 1.3% fourth-quarter growth predicted only one month ago, and the primary factor expected to drive this year’s modest increase in expected year-end holiday travel.

The price of West Texas Intermediate crude oil also was down $1.64 at the close of formal trading on the NYMEX on Dec. 12, finishing at $97.77 and continuing last week’s decline, which was the largest in 11 weeks. Today’s drop was attributed to the ongoing dismal outlook for the global economy, particularly in the Euro zone, where sovereign debt concerns remain front of mind. This sentiment resulted in global equities markets turning lower, while the U.S. dollar strengthened relative to foreign currencies. As the dollar strengthens relative to currencies abroad the effective purchasing power of those holding foreign currencies decreases. As this happens, oil futures become a less attractive investment, which exerts downward pressure on prices.

While crude oil prices remain near multi-month highs, the price of gas at the pump is at a more than nine-month low.  The current national retail average price for a gallon of self-serve regular gasoline is $3.27 — the lowest price since Feb. 24 when the Libyan civil war was only 10 days old. Today’s price is fractions of a penny less than one week ago and 16 cents less than one month ago.  While motorists earlier this year often paid prices in excess of 90 cents higher than the same day in 2010, today’s price marks a comparatively small 30-cent year-over-year premium. Today’s year-over-year premium is the smallest since Dec. 4 of last year.

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