If you've been holding off on a road trip vacation because of the high cost of gasoline, this may be a good time to load up the minivan and head out on the highway.
The average price of gas posted the largest July decline in six years, according to the latest survey by AAA, as refiners are pumping out record volumes of supplies.
The drop is even more surprising given the recent flare-up of global conflicts from Libya to Israel, producing the kinds of headlines that typically drive crude oil prices higher. But with the U.S. now producing more crude than it imports, oil prices have remained relatively tame.
"The boom in North American crude oil production provides a cushion that helps insulate the U.S. from some of the impact of global conflict on oil prices," said AAA spokesman Michael Green.
Consumers this week have paid the lowest gas prices since the middle of March. The national average price for a gallon of regular gas was $3.52, according to AAA.
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As always, those averages mask wide differences in what you'll pay depending on where you live. Prices vary state by state because of a variety of factors—from transportation costs, state gas taxes and differences in regional supplies of cleaner-burning summer blends.
Statewide average pump prices were highest this week in Hawaii ($4.34), Alaska ($4.13), California ($3.98), Oregon ($3.92) and Washington ($3.92). Those with the cheapest gas include: South Carolina ($3.25), Alabama ($3.26), Tennessee ($3.29), Oklahoma ($3.30) and Missouri ($3.30).
Pump prices are expected to continue to decline more gradually for the rest of the summer driving season—barring major hurricanes, refinery outages or other unforeseen kinks in supply.
Though prices have taken an unusual seasonal drop, they're still higher than they were during the dead of winter—when consumption falls off and prices ease. Oil refiners have posted solid profits thanks in part to continued strong demand for exports of gasoline and diesel from Mexico and Europe.
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Strong demand for crude and natural gas helped Exxon Mobil, the world's largest public oil company, post stronger-than-expected profit in the latest three months—even as overall production dropped 6 percent. Exxon has struggled to replenish its reserves, investing in massive new projects around the world that take years to develop.
Exxon said net income rose to $8.78 billion, or $2.05 per share, a 28 percent jump from year ago.
—By CNBC's John Schoen. Follow him on Twitter @johnwschoen or email him.
