BEAUMONT, Texas — Low oil production and high demand for fuel has led to an increase in gas prices, and petroleum analysts said it might be awhile before Southeast Texans see them return to normal.
Americans are paying millions more per day on gasoline than they were in 2020, according to Patrick de Haan, head of petroleum analysis for GasBuddy.
“We're paying about $420 million dollars more every day on gasoline than we did a year ago, and that's a tough pill to swallow,” Haan said.
The combination of low production and the high demand for gas is driving up fuel prices. Haan said these factors are a product of the pandemic.
According to Hann, it all started when Americans parked their cars for a few weeks, which was enough time for the price of oil to plummet into negative territory for the first time ever.
“That set the stage then for oil companies to let go thousands of workers, shutting down millions of barrels a day in oil production,” Haan said.
When pandemic restrictions began to loosen in 2021, the demand for oil and gas shot back up. However, with many employees in the fuel industry still without job, production remained low and this led to higher gas prices nationally.
“It's kind of like the housing market where your house is worth 20% more than what it was a year ago,” Haan said. “The same holds true for the price of commodities. There's simply not enough oil to go around.”
Haan said Southeast Texans can expect to see these high gas prices for the rest of 2021.
“We could see the rest of the year prices remaining at or even above where they are today," Haan said. "Simply because the bottlenecks, the logistical challenges, the supply chain issues, and low oil production could continue into the latter half of the year.".
Haan said the good news is that with Southeast Texas in close proximity to natural gas, area gas prices should remain lower than other states.
While Haan expects high gas prices to stick around, he does not expect them to reach record highs.