(The Daily Advertiser) – Gasoline pump prices crept northward Monday in Louisiana, continuing a trend initiated almost three weeks ago. But experts suggest gas price hikes won’t slow expected record holiday travel this year.
The average price for a gallon of regular in Louisiana hovered around $2.06 Monday morning, up almost 3 cents from last week, a dime from last month and a whopping quarter from last year, consumer website GasBuddy.com reported. Fear not.
Around Acadiana, average pump prices ranged from $2.03 in Iberia Parish to $2.10 in Acadia. In Lafayette, the low early price was $1.93 at Sam’s, $1.94 at Costco and $1.95 at RaceTrac on Evangeline Thruway. Those prices compare favorably to elsewhere in the U.S., where pump prices were at $2.20 in Atlanta, $2.52 in New York City and $2.71 in Los Angeles.
GasBuddy predicted in its annual 2016 forecast average prices at $2.01 for December. But a late November agreement among Organization of the Petroleum Exporting Countries members to cut crude oil production has excited the oil market, driving up prices to a 2016 high of $51.93 a barrel for U.S. crude oil and $55.25 for Brent crude. Rising pump prices for refined gasoline followed.
OPEC promised in late November to cut the global oil glut that it created two years ago when it produced oil without restriction in a naked attempt to increase the worldwide supply, cut global prices and drive U.S. shale oil producers, whose production costs are higher than Saudi Arabia’s, out of the global market.
GasBuddy senior analyst Gregg Laskoski said the new OPEC agreement won’t become effective until January, but higher refined gasoline prices arrived even before Santa. OPEC hasn’t cut production yet, he said; prices have been “jacked up” on “rhetoric alone.”
The pace of price increases has slowed, though, since the initial optimism earlier this month. He said pump prices will likely flatten or decrease in January when travel tapers off and when companies unload their cheaper winter blends of gasoline at bargain prices.
Meanwhile, U.S. drivers are expected to travel in record numbers, according to AAA, which predicted Monday that 103 million Americans will travel during the year-end holidays. That’s up 1.5 percent from 2015.
Don Redman, spokesman for AAA in Louisiana, said 93.6 million Americans will take to the highways while air travel will increase by 2.5 percent during the holidays. The holidays come Dec. 23-Jan. 2 this year.
“That’s the most on record,” he said of holiday travelers.
Pleasure travel will be partially fueled by savings that consumers have reaped from low gas prices for two years.
Redman said consumer confidence is up, as are wages and spending. Meanwhile, consumers have been saving $100 to $150 a month in fuel prices over 2012-14.
“We are a nation built on cheap energy,” he said.
AAA holiday travel tips
Check the weather. Cold and winter storms are predicted in parts of the U.S.
Winterize your vehicle. Check batteries and radiators.
Inflate tires. AAA expects to assist almost 1 million drivers during the holidays; many will have flat tires.
Beware of “drowsy driving.” About 21 percent of fatal accidents are linked to deficient sleep.
Source: Don Redman, AAA of Louisiana