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Demand increases gasoline prices ahead of Memorial Day; oil prices climbing too

Travel is expected to be up significantly for this Memorial Day
Motorists on the interstate.
Motorists on the interstate.(Source: WVUE)
Updated: May. 27, 2021 at 7:08 PM CDT
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NEW ORLEANS (WVUE) - Memorial Day travel is expected to be up significantly this year and demand for gasoline is driving up prices at the pumps, according to AAA.

Also, higher crude oil prices are starting to help the oil industry.

Sean Travers stopped at a Metairie gas station. He and his son were heading home from Grand Isle after a pre-Memorial Day getaway.

“I took off this week, during the week, so we spent a week in Grand Isle and now I’m heading home, got to work tomorrow, Saturday and Sunday,” said Travers.

Fueling his truck has become more expensive recently.

“Last time I filled it up it was around $75, yes, yes. I mean it was a lot, don’t get me wrong, but it is what it is. What are you going to do?” Travers stated.

Don Redman of AAA says prices are up around the country as many people will head to beaches.

“In Mississippi and Louisiana, we’re hovering about $2.72 a gallon; is the average as well as into Texas. I think that when you start going east of here, when you get into Alabama, Florida, Georgia then you’re going to be looking at prices between $2.80 to $2.90 a gallon and some places in the panhandle of Florida, you’re looking at prices over $3 a gallon,” said Redman.

With COVID-19 cases dropping and millions of Americans now fully vaccinated, more people are expected to hit the road for the holiday weekend.

“We’re forecasting for Memorial Day weekend travel numbers up 60% over last year,” said Redman. “It’s really not fair to compare anything to last year because it was really just in the dumpster last year.”

Driver Kay Fabian has also noticed the higher gasoline costs.

“They are pretty, pretty up right now,” said Fabian.

“I usually spend about $40-something and it’s up to about $50 so it’s going to affect a lot of families that want to travel.”

Redman said drivers across the country are paying more for fuel.

“It certainly is higher across the board in every state. In fact, we haven’t seen prices higher than this or as high as this since 2014,” he said.

Redman says demand is driving gas prices.

“We’ve seen this big increase, people are hungry to travel, and we’ve seen a reflection in terms of demand for gasoline as well as well as the price for crude,” Redman stated.

And Redman says because demand for gasoline is currently high, in some areas gasoline delivery trucks cannot keep up.

“We’re even looking at situations where there are not enough delivery truck drivers for gasoline in certain locations. So, you still may see some gas stations that are out of gas but that’s not necessarily a case that may have anything to do with supply. We have a healthy supply,” said Redman.

An increase in the price of a barrel of oil is beginning to help Louisiana’s oil and gas industry, which has felt pain over the past several years.

Mike Moncla is President of the Louisiana Oil and Gas Association.

“Things have gotten better,” said Moncla. “The price of oil has a lot to do with it.”

Still, he says the industry would benefit from even higher oil prices.

“So, you know, really $67 is better than $37 obviously, but in south Louisiana, north Louisiana we really need a little bit higher than that to get profitable on the service side,” Moncla said.

And he hopes global demand for oil continues to rebound.

“We’re hoping that the demand continues to increase as we come out of COVID,” said Moncla. “If the supply doesn’t keep up with the demand, then we’re going to have higher prices,” he said.

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