Few Idahoans will be deterred by post-eclipse pump prices and hurricane aftermath
BOISE – (August 30, 2017) – Post-eclipse pump prices are still climbing across Idaho amid high local demand, but higher prices and tight Gulf Coast supplies due to Hurricane Harvey are unlikely to derail Labor Day plans to visit family and friends to cap off the summer, says AAA.
“Hurricane Harvey has poured a record amount of rainfall – 51 inches – on the Houston area,” says Matthew Conde, public affairs director for AAA Idaho. “Several refineries are offline, and the extent of the damage isn’t known at this time. While a ripple effect will lead to higher gas prices in some parts of the country and a higher national average price, current information suggests higher pump prices in the Gem State will be more a result of high travel demand than supply issues.”
AAA expects Harvey to generate a short-term, noticeable spike in national average gas prices that should start dropping again in mid-to-late September, barring extensive refinery damage.
Today’s U.S. average price for gasoline is $2.40, up nine cents from a month ago and up 19 cents from a year ago. The price jumped about 2 ½ cents overnight. If Texas refineries are down for an extended period of time, the national average could climb above $2.50 a gallon, the highest price since August 28, 2015.
At $2.75 a gallon, Idaho motorists are paying 29 cents more today than last year, and prices could reach $2.85 per gallon in the coming days. The last time prices were that high for Labor Day was September 2015. Even so, prices are considerably lower than they were from 2011 to 2014.
Here’s a brief retrospective of Idaho’s Labor Day gas prices over the past decade:
“Strong travel demand throughout the summer has kept upward pressure on gas prices across the Rockies region,” Conde said. “This summer, eclipse travel injected an extra burst of demand for Idaho fuel that has carried over into Labor Day weekend.”
Many parts of the Gem State were in the eclipse path of totality, motivating drivers inside and outside of Idaho to purchase the fuel necessary to reach a prime viewing area.
“The recent, rare eclipse event casts some uncertainty on Labor Day travel projections,” Conde said. “On one hand, some people stayed home to avoid eclipse traffic and congestion, and they may take the opportunity to celebrate Labor Day as usual. On the other hand, some of those that did travel may be less inclined to take another trip over the holiday. This year, many Americans are willing to finance their summer travel through debt, but motorists will decide when enough is enough.”
Over the summer, the number of travelers taking to the road, sea, and sky increased by 2.9 percent, including here in Idaho. High consumer confidence, low unemployment and relatively low gas prices were major factors in the decision to travel this year. It’s possible that Labor Day travel will be a continuation of this trend in the Gem State.
The recent arrival of Hurricane Harvey in Texas and Louisiana has affected local fuel production and distribution, along with regional demand. About 19 percent of the Gulf Coast’s oil refining capacity is offline, and the U.S. market is losing about 3 million barrels of gas production per day. However, local demand has also decreased, which partially offsets the reduced supply. Time will tell if demand recovers faster than supply, or vice versa, and prices will be impacted by the outcome.
AAA notes that price increases do not currently reflect a shortage of gasoline supplies in the Gulf Coast region, but rather distribution capability. Overall stocks in the Gulf are above average levels and will be available to drivers once power and refinery systems are restored and area roads are cleared.
This morning, the West Texas Intermediate crude oil benchmark is trading near $46 per barrel, down four dollars from a month ago and about a dollar less than a year ago.
AAA and other industry observers will continue to monitor oil and fuel market activity to keep members informed.
Where will Idahoans Go?
In a typical year, historical data supports the prediction that around 35 million Americans will make one last journey before the summer ends. Almost 90 percent of them will travel by car.
“Many Idahoans take advantage of the warm weather to have one last outdoor adventure close to home,” Conde said. “With most kids back in school, families often look for a quick getaway to camp, swim, hike, or ride ATVs.” Nearby state and national parks provide attractive Labor Day destinations.
“The days are getting shorter, so it’s a good idea to have flashlights and extra batteries in your emergency kit, along with food and water,” Conde said. “Wildlife will also become more active as dusk arrives sooner, so make sure to scan the roads for animals when traveling.”