Despite global unrest, gas prices favor area’s consumers

Labor Day gas prices in the United States were the cheapest since 2010.

Supply is exceeding the demand across the nation given that gas production is up in the United States.

With oil and gas production on the rise, Louisiana’s gas prices range from $2.83 to $3.79 per gallon, well below the national av-erage of $3.45 per gallon.

Oil prices, however, can rise or fall on a dime.

“The price of crude oil, supply and demand, the value of the dollar versus other foreign countries, inventories, threats of disruptions (hurricanes and the like), all play a role,” Louisiana Mid-Continent Oil and Gas Association President Chris John said.

Prices at the pump typically trend downward after Labor Day after the summer month end.

“Simply put, people drive less,” John said. “There are less vacation trips.”

And while the public may laud lower gas prices, the oil industry loathes them.

“It costs a lot of money to explore for oil in the Gulf of Mexico so the price of oil has to be high enough to make ends meet,” economic consultant Loren Scott said.

The trickle-down effect can impact the area’s jobless rate, too, if oil and gas companies are stifled from drilling.

Fortunately, lower prices and fewer long trips have not significantly affected Terrebonne or Lafourche parishes, which boast Louisiana’s lowest unemployment rate. But the industry is keeping a watchful eye on the emergence of alternative fuels, smart cars and more fuel-efficient vehicles could seriously impact the market in the next five years, according to AAA Fuel Analyst Don Redman.

For now, all eyes are on the pumps and the most affordable fuel.

“We do have a healthy supply and an amply supply of gasoline. Traditionally, when you have Russia invading a country, or making an excursion into a country, depending on who’s wording you believe, or you have bombs flying in the Middle East and Israel launching counter assaults into Gaza, traditionally when you have those things, you’re looking at more than $100 a barrel,” Redman explained. “Interestingly enough, we saw the market sort of counter-react initially with Russia moving into the Ukraine and then again in the summer with ISIS. But then it corrected itself.

“This is a really odd situation where the market is just straight-up ignoring world events and focusing more on the fact that we have a very healthy inventory of petroleum and refined products,” he said.

So, of course, while some forecasters say that this is good news for the consumers in the short-term, Redman said. Economists mindful of the long-term.

“I often advise…that when you see a sudden retreat in prices, it’s usually an indication that something has gone wrong in the economy,” Redman said.

Louisiana gas prices continue to range between $2.83 to $3.79 per gallon, well below the national average of $3.45 per gallon.

MICHAEL HOTARD | THE TIMES