Gas prices spiking, no cause for alarm

Booming economy partially to blame

Don Ames
April 18, 2019 - 9:15 am
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Gas prices in metro New Orleans have been steadily increasing recently. 

But, a dramatic increase in the months ahead is not expected. 

AAA fuel analyst, Don Redman, says two factors are responsible for the latest increases.

"A big issue right now is summertime-like demand for gasoline. And, this the time is when the refineries are down. And, so you don't have the refining capacity right now."

"Typically we're at about 93 percent refining capacity at this time, but we're only at around 87 percent right now, due to refinery maintenance," says Redman.

"That's coupled with summertime-level demand this early in spring. And that's usually a sign of a booming economy."

We're currently averaging about $2.53 a gallon in the metro area. That's about a dime more than a month ago, but less than a nickel more than a year ago. 

And, nothing unusual is expected in the month ahead. 

"We had forecast prices similar to where we were last year, which is about $2.60, $2.65 by the time we got into June. And I think we'll hold on to that."

Redman says we're in much better shape than many other areas of the country. 

The Midwest has been experiencing major floods since mid-March, contributing to high gas prices in five states along the Missouri River. Oil refinery maintenance on the West Coast is being blamed for gas prices that have surged by at least 20 cents a gallon in one week.

"Some people on the West Coast, particularly California, are paying four dollars a gallon right now," says Redman.

"But, I think, in the Gulf South, we'll still be in pretty good shape and close to what we paid this time last year."
 

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