Money & Business

AAA Keeps Eye on Gas Prices Amid Harvey-Soaked Labor Day

By / Aug 31, 2017 (bizoo_n/iStock/Getty Images Plus)

The automotive group, which recently stopped tracking Labor Day traffic, is nonetheless in front of a big issue for motorists this Labor Day—the fallout from Hurricane Harvey.

A couple of years ago, AAA decided to stop nationally tracking Labor Day traffic in the same way that it has long tracked Memorial Day, Fourth of July, and Thanksgiving road traffic. The reason? More people tend to stay home for what’s considered the unofficial end of summer, so the demand for such a statistic was a bit lower.

AAA hasn’t changed that policy this year, but it is tracking another statistic closely at the moment—gas prices. Prices have remained fairly low nationwide over the past two years, generally averaging below $2.50 per gallon, thanks in no small part to strong inventories nationwide.

But AAA warns that, because Hurricane Harvey hit one of the energy sector’s industrial centers, that could change pretty quickly. Gas prices are at $2.45 nationally, a jump of 7 cents from just three days ago. That said, the full impact of that shift won’t be known right away, according to spokeswoman Jeanette Casselano.

“No doubt, Harvey has impacted operations and access to refineries in the Gulf Coast. However, a clear understanding of overall damage at the refineries is unknown,” Casselano said in a Monday news release. “Despite the country’s overall oil and gasoline inventories being at or above five-year highs, until there is a clear picture of damage and an idea when refineries can return to full operational status, gas prices will continue to increase.”

In the Texas storm zone, the effects of  Harvey greatly varied, with gas prices decreasing slightly in Corpus Christi due to decreased demand, while Houston residents, many of whom filled up in the days before the storm, saw increases.

In comments to CNN Money, the Oil Price Information Service’s Tom Kloza, whose firm tracks prices for AAA, suggested that the national price average could get as high as $2.75 per gallon.

“There’s a worry now that most of the Texas refineries could be compromised for weeks rather than days,” Kloza told the news outlet.

CNN Money, which said that 30 percent of the industry’s capacity has been shut down or reduced in the wake of the storm, noted that it took six weeks for the oil system to normalize after Hurricane Katrina.

The Trump administration has taken steps to ease the pressure on the country’s oil supply by opening up the Strategic Petroleum Reserve, making available about 500,000 barrels of crude oil in the coming days—the first time the reserve has been tapped since 2012.

“The department will continue to provide assistance as deemed necessary and will continue to review incoming requests for SPR crude oil,” Energy Department spokeswoman Jess Szymanski told The Hill.

Ernie Smith

Ernie Smith is the social media journalist for Associations Now, a former newspaper guy, and a man who is dangerous when armed with a good pun. More »

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