Memorial Day weekend has come and gone, marking the start of the U.S. summer driving season. This sets the stage for a second leg-up in the gasoline price rally which began in the third week of April. UGA, the gasoline ETF, is up 56% since MRP’s report titled “The Pieces are falling in Place for a Gasoline Price Rebound”. On a year-to-date basis, UGA is still down 45%, so there’s still a ways to go in the gasoline recovery story.

Related ETF: United States Gasoline Fund ETF (UGA)

Upcoming Miles Driven Boom 

MRP believes U.S. miles driven will boom this summer, resulting in higher demand for gasoline.

After being cooped indoors for two months, people will be catching up on services that were postponed at the height of the pandemic, such as hair styling, dog grooming, nail grooming, routine doctor visits, personal training and more. How quickly people go back to work and to what extent they telecommute will also impact miles driven, as will the perceptions of safety on public transportation. Low fuel prices are another factor to consider. In the past, very low gasoline prices have caused a resurgence in car travel, per the Institute for Energy Research (IER).

With cruises and air travel holding less appeal in the immediate aftermath of the pandemic, many Americans are expected to vacation closer to home this summer and drive to beaches, national parks or relatives instead of flying. The American Automobile Association (AAA), a federation of motor clubs throughout North America, remarked recently that Americans are starting to plan future vacations. AAA online bookings have been rising, suggesting travelers’ confidence is slowly improving. When it is safe to travel, AAA predicts vacationers will have a preference for U.S destinations, mostly local and regional locations, and the great American road trip.

In the meantime, Apple’s Mobility Trends report indicates that traffic in the United States and other countries like Germany has about doubled in the past three weeks. Foursquare, another data source, suggests customer traffic at gas stations has returned to pre-COVID-19 levels in the Midwest and in rural areas throughout the country…

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