By Nathalie Voit

The national average gas price fell 12 cents over the week on July 11 even as demand for gasoline kept rising.

According to data from auto club AAA, the U.S. average for a gallon of regular gas tumbled to $4.68 at the start of the week. Pump prices declined despite growing demand from U.S. travelers who vacationed over the busy Fourth of July holiday weekend. According to AAA, an estimated 42 million Americans hit the road this Independence Day, the highest number on record.

“Usually, more people buying gas would lead to higher pump prices,” AAA spokesperson Andrew Gross said in a press release.

“But the price for oil, the main ingredient in gasoline, has fallen and is hovering around $100 a barrel. Less expensive oil usually means less expensive gas,” he noted.   

As of July 11, near close-of-day, WTI crude for August delivery is hovering around $103.43 a barrel, down about 1.30%. International oil benchmark Brent crude is trading at $106.45 a barrel, down just over half a percentage point.

According to data from MarketWatch, WTI plunged 4.64% over the week and 14.53% over the past month.

Meanwhile, Brent crude oil futures have slipped 6.48% over the last five days and 13.0% over the last month.

The lower price of both contracts has led to lower prices at the pump.

At the same time, the U.S. Energy Information Administration (EIA) reported domestic demand for motor gasoline surged from 8.92 million barrels a day (b/d) to 9.41 million b/d in the week ending July 1. On the other hand, total domestic fuel inventory dipped by 2.5 million barrels to 219.1 million barrels ahead of the national holiday weekend, according to EIA weekly stock data.

AAA said these supply/demand dynamics would typically translate to higher prices at the pump, but the falling cost of crude oil has offset the rise in gas prices.

Compared to one month ago, the national average for a regular gallon of gas is 32 cents cheaper. However, AAA said average gas prices are still $1.53 higher over the year.