IHS Markit Vice Chairman Daniel Yergin offers his predictions amid the 'unprecedented increase in demand' as the economy recovers from the COVID-19 pandemic.
As the summer driving season is revving up, AAA is warning that a small number of gas stations across the U.S. may have trouble meeting rising fuel demand. However, it isn't due to a lack of supply.
When gasoline demand dropped due to the spread of the COVID-19 pandemic last year, many tanker truck drivers either retired or went to other industries for work, according to AAA spokesperson Jeanette McGee. Now that gasoline demand is back on the rise as the economy reopens, McGee says the reduction of drivers is causing delays in fuel deliveries to gas stations.
"It is really important to note that there is plenty of gasoline supply in the U.S. It’s just a matter of getting fuel to pumps in a timely manner to meet growing demand," McGee told FOX Business. "From time to time, this may lead to some pumps in a market seeing low to no fuel, but drivers are able to go to another station and fill-up. That is the trend we’ve seen since April in a handful of markets. This is not happening market-wide, but a small number of pumps at a small number of stations."
GAS PRICES ABOVE $3 PER GALLON TO REMAIN ELEVATED ALL SUMMER
In late June, the Oil Price Information Service (OPIS) documented at least a half dozen cases of bagged pumps and occasional outages of unleaded regular or premium gas in the Florida Keys, Central Iowa, South Central Ohio, Washington, Oregon, and Colorado.
"Most of the outages have been brief enough so that motorists have regarded the lack of availability as an annoyance or inconvenience as opposed to a crisis," OPIS global head of energy Tom Kloza said. "But the long lines and the hoarding that surfaced in mid-May in southeastern states could be reignited if more stations run out of fuel."
The Energy Information Administration said earlier this month that an average of 9.1 million barrels per day will be consumed this summer, an increase of 1.3 million barrels per day compared to last year, but more than 0.4 million barrels per day less than summer 2019.
However, OPIS says there is widespread speculation that demand could increase to 9.6 million or 9.7 million barrels per day in July and August, meaning an additional 2,600 to 3,150 trucks would be needed on the road each day to move gasoline from bulk terminals to stations.
"The wildcard that could really stress the system comes via unpredictable consumer behavior. When the Colonial Pipeline shut down, consumers even 500-1,000 miles away felt compelled to top off tanks, in what was a hysterical reaction to a regional problem," Kloza added. "The sight of bagged pumps in various regions might prompt similar behavior this summer, thanks in part to the immediate creation of apocryphal reports of not enough gasoline to go around."
Gasbuddy, which operates apps and websites based on finding real-time fuel prices at more than 140,000 gas stations, said in a blog post that the temporary outages seen at some stations are not expected to impact gas prices.
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However, McGee warns that gas is still expensive and that traffic will be heavy with a record 43.6 million Americans expected hit the road, or 91% of all holiday weekend travelers, a 5% increase compared to 2019.
The national average gas price stands at $3.12 per gallon as of Thursday, according to AAA.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| USO | UNITED STATES OIL FUND L.P. | 50.62 | +0.74 | +1.48% |
| UNG | UNITED STATES NATURAL GAS FUND LP UNIT (POST REV SPLIT) | 12.79 | -0.29 | -2.22% |
| UGA | UNITED STATES GASOLINE FUND LP PARTNERSHIP UNITS | 36.08 | +0.22 | +0.61% |
Looking at the rest of the summer, AAA expects prices to remain above $3 per gallon, with increases likely over the coming weeks depending on crude oil prices. Crude oil is trading above $74 per barrel, the highest price in nearly three years.
De Haan told "Cavuto Coast-to-Coast" that a drop below $3 per gallon might not occur until October.
"Keep in mind, too, with the prime of hurricane season now around the corner, there's so many potential disruptions that could take gas prices even higher," he added.
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July 01, 2021 at 08:25PM
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Tanker driver shortages could make gas stations struggle to meet summer fuel demand: AAA - Fox Business
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