This Independence Day holiday is expected to be the busiest travel period for Americans on record, according to AAA, with nearly 47 million Americans forecast to travel 50 miles or more away from home. That's an increase of more than 5 percent compared with last year and the highest number since AAA started tracking 18 years ago.

What makes these statistics particularly interesting is gas prices. Traditionally, $3 per gallon is the threshold over which motorists start adjusting their driving behavior. According to AAA, the national average for gas is $2.860 per gallon. Of course, for City National clients in California it is higher — $3.662 — and in New York state the average price is $3.023. Our Nashville clients are fortunate enough to pay just $2.602 per gallon to fill up their cars.

But with prices relatively high, why this record-breaking forecast? Well, part of it is that AAA defines “Independence Day Weekend" from July 3 through July 8, which is a lot of days for driving. But the other factor is the number of alternative-fuel vehicles on the road now. The old rules apparently do not apply as much anymore.

In a related development, it's fascinating to look at what is happening in the U.S energy industry. Last week, the U.S. set another record for oil production. This follows a trend reported by the U.S. Energy Information Administration (EIA) and it is related to the ramping up of shale-oil production.

The_U.S._Returns_to_the_Forefront_of_Oil_Chart

In a research piece early this year, RBC Capital Markets noted how the structure of U.S. energy production was revamped after the Great Recession. They call the U.S. energy business the “Walmart of the oil market," meaning that we can provide pretty much anything the world needs in terms of product flexibility — diverse crude quality, storage and refining capacity, as well as an integrated pricing market. In fact, the EIA forecasts that the U.S. will be a net exporter of energy by 2022.

Our View: The boost in production from U.S. energy companies is likely to impact the international trade wars we have been talking so much about. Prospects of increased oil exports are starting to factor into conversations about how the U.S. can manage the impact of these conflicts. For instance, exporting more oil to China would help reduce bilateral trade deficits - allowing both the U.S. and China to claim victory around their trade goals even though those improvements may not be directly due to the oil policy.

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