July 4 travelers could see lowest gas prices of the year

Good news awaits the millions of people expected to hit the road over Independence Day: The cost of a gallon of gas is approaching its lowest point since February.

Prices are down in all but three states this week, according to AAA, and most drivers – especially in the South – will likely pay a few cents below the national average of $2.26 per gallon. That’s a drop of 11 cents from May and four cents cheaper than a year ago.

About 37.5 million people will drive to their holiday destinations this year – a record number and about a million more than last Fourth of July, according to AAA.

That’s likely a reflection of the market in crude oil. Inventories are at their highest in nearly a year, sending prices spiraling down by 22 percent since January. Meanwhile U.S. refineries are churning out a record amount of gasoline – more than 17 million barrels per day.

“There’s a lot of oil out there right now, and that oil is being turned into gasoline,” Tom Kloza, chief oil analyst for the Oil Price Information Service, told CNN.

That’s more than meeting the demand at a time when, typically, gas prices are expected to rise. But per-gallon prices in a handful of states – South Carolina, Oklahoma, Missouri, Mississippi and Alabama – were below $2 on Tuesday, according to GasBuddy.com, and several other southern states are hovering right around the $2 mark.

While strong demand and smaller inventories will keep prices relatively high in the West and Rocky Mountain regions, the overall trend suggests that drivers will continue to see cheap gas for the remainder of the summer travel season.