For years, news of a hurricane swirling through the Gulf of Mexico has been more than enough to spike gas prices.
But the swift passage of Hurricane Idalia over the Florida peninsula and through Georgia and the Carolinas appears to have had only limited impact at the pump, according to AAA.
Gas prices remain stable
AAA described pump prices “neutral,” with the national average for a gallon of gas falling by a penny since last week to $3.82 as the nation’s motorists head into the final weekend of the summer and the post Labor Day return to school.
Today’s national average of $3.82 is 7 cents more than a month ago but 2 cents less than a year ago.
Oil prices did rise at midweek amid ongoing concerns the hurricane could interrupt fuel supply in the Southeast. However, some fuel terminals have resumed operations, and more are expected in the coming days as storms subside and damage assessments can be undertaken, according to AAA’s assessment.
The negligible rise in gasoline prices in the face of a powerful hurricane also appears to reflect a longer-term trend towards American’s using less gasoline as electric vehicles become more common in large urban areas. Even with the difficulties with the charging networks, EVs account for about 7% of the new vehicles sold in the U.S. and nearly 25% in California, the nation’s top automotive market, noted Veloz, an organization that promotes EV sales.
Demand for fuel falls flat
Oil and gas experts, observed AAA, have noted overall gasoline demand this summer failed to match previous years, with consumption getting little “lift” from vacation travel this summer despite retail gasoline prices below last year’s.
Andrew Gross, AAA spokesperson, said there is a lot of speculation as to why, but no one seems to know for sure.
“With visits to the pump rather flat and the price of oil hovering around the $80 per barrel mark, the national average for a gallon of gas will likely stay where it is through this holiday weekend,” he said.
“Hurricane Idalia may cause regional price jumps due to station damage, flooded roads, and power outages, but as in past years, these things are usually fixed in a few weeks.”
New data from the Energy Information Administration showed the demand for gasoline increased slightly from 8.91 to 9.07 million barrels per day last week.
Meanwhile, total domestic gasoline stocks took a slight step back to 217.4 million barrels. Although demand has increased, fluctuating oil prices have limited pump price increases.
Earlier this month, the price for a barrel of oil increased amid market optimism that oil demand worldwide will be more robust than expected during this half of 2023 and into 2024. According to the Organization of the Petroleum Exporting Countries (OPEC), world oil demand is expected to rise by 2.25 million barrels per day (bpd) in 2024, compared with growth of 2.44 million bpd in 2023.
Additionally, the U.S. Energy Information Administration reported that total domestic commercial crude inventories increased from 439.8 to 445.6 million barrels.