Low gas prices may not coax holiday travelers


Share with others:


Print Email Read Later

If you're hitting the road for Thanksgiving next week, you might have a little more money to spend on stuffing.

Average Pittsburgh-area gasoline prices have dropped 38 cents since the beginning of September to an average of $3.31 per gallon of regular, 33 cents cheaper than Thanksgiving last year. It's the least expensive that gas has been over Thanksgiving since 2010 when Pittsburgh-area drivers were paying less than $3 per gallon.

Several factors have driven down the price of crude oil in the past two months. Domestic production is at a 24-year high, and the Energy Information Administration announced last week that for the first time in 18 years, the United States is producing more oil than it imports.

"A lack of hurricanes this year minimized disruptions from Gulf Coast rigs that produced oil, and it also minimized disruptions from refineries in the gulf," said Patrick DeHaan, senior petroleum analyst at GasBuddy.com, a Minnesota website that tracks prices at more than 140,000 gas stations in North America.

Last year, Superstorm Sandy struck the East Coast at the end of October, keeping oil prices higher than normal through the holidays.

There are political factors at play, as well, as tensions between the United States and oil-producing countries such as Iran and Syria have cooled in recent months.

Jeff Lenard, vice president of strategic industry initiatives at the National Association of Convenience Stores, based in Alexandria, Va., said demand plays a role in the cost of gas. Fuel-efficient vehicles and modified driving habits have allowed Americans to burn less fuel.

Another factor in lowering demand for crude oil is increased production of natural gas in places such as the Marcellus Shale region that includes much of Pennsylvania.

Infrastructure improvements, Mr. Lenard said, have created more stability in the market, as American-made crude oil is more readily available to domestic customers now than it was just a couple years ago.

But the low gas prices aren't expected to coax more drivers than usual to travel this Thanksgiving.

AAA, the nonprofit travel association headquartered in Heathrow, Fla., estimates 43.4 million Americans will travel 50 or more miles next week for Thanksgiving, a 1.5 percent decrease from 2012 when 44 million traveled during the holiday. The vast majority of this year's travelers -- 38.9 million -- will travel by car.

The dip in travel reflects trends seen during other holidays this year, as AAA estimates fewer people traveled for Memorial Day and the Fourth of July than in 2012, said Bevi Powell, senior vice president of AAA East Central, based in East Liberty.

Gas prices, she said, rarely impact peoples' plans to travel. Instead, the sluggish economic recovery is forcing people to evaluate their budgets across the board.

"Gas prices are something that people budget for, but they don't determine whether they go or not," Ms. Powell said. "Usually, it's just part of the budget."

Mr. Lenard said short-term changes in prices have had little effect on the amount of gas used and consumed. But it does have an effect on consumer psyche, since falling gas prices traditionally give people more confidence in the economy.

"Does it lead to spending in other channels?" he said. "We know that consumers feel better about the economy when gas prices are dropping. If you need to make sales between Thanksgiving and Christmas, that's good news."

Especially in an economic climate where many analysts are pessimistic about holiday sales.

Drivers should expect relatively low gas prices throughout the holidays, Mr. DeHaan said, though it is possible prices have bottomed out. "I don't see any 30- to 50-cent increases," he said, "but we could see a week or two here where prices go up ever so slightly."

Prices traditionally fall in the winter, when refiners can abandon the costlier summer blend of gasoline, which protects against evaporation. They rise in the springtime as refineries perform maintenance to prepare for their summer blend.

Heating costs are low, too, said Mike Adams, vice president of Adams Petroleum Services in Ohio Township. Though natural gas prices are higher than they were last year, heating oils are down more than 20 cents per gallon from last year, he said.

While analysts might speculate on the short-term future of the price of gas and home-heating costs, Mr. Adams said it is hard to look into the crystal ball.

"This industry is so unpredictable because of so many things," he said. "There's supply and demand and geopolitical issues ... it's just crazy. There's so much that affects the daily life of the American public."

Michael Sanserino: msanserino@post-gazette.com, 412-263-1969 and Twitter @msanserino.


Join the conversation:

Commenting policy | How to report abuse
To report inappropriate comments, abuse and/or repeat offenders, please send an email to socialmedia@post-gazette.com and include a link to the article and a copy of the comment. Your report will be reviewed in a timely manner. Thank you.
Commenting policy | How to report abuse

You have 2 remaining free articles this month

Try unlimited digital access

If you are an existing subscriber,
link your account for free access. Start here

You’ve reached the limit of free articles this month.

To continue unlimited reading

If you are an existing subscriber,
link your account for free access. Start here