Rising gas prices bode well for the future

Rising gas prices bode well for the future

Writer: Catie Schwartzman

 

2 min read February 2021 — Most tourism and entertainment venues are either closed or operating below capacity; unemployment remains high at 6.1%. The pandemic is still taking its devastating toll across the country and the state. Demand for travel is shallow. And yet, the price of a gallon of unleaded gasoline hit a peak at the end of January, according to Travel Club AAA. Michigan and Florida lead the nation in price increases at $0.11, with the cost per gallon across Florida on Feb. 9 about $2.49. The national average gas price is more expensive than a year ago for the first time in almost a year.

Within Florida, the most expensive gas metro markets are West Palm Beach-Boca Raton at $2.59, Port St. Lucie at $2.52 and Fort Lauderdale at $2.51. The lowest gas prices in metro markets come from Panama City at $2.38, Tallahassee at $2.39 and Crestview-Fort Walton Beach at $2.40.

Optimism for the COVID-19 vaccine’s rollout caused a rise in gasoline prices, according to experts. With the mentality of getting back to “normal life” soon, traders have driven gas prices up, expecting the commodity to be more desirable over the coming weeks and months. 

“The biggest contributor to rising oil prices is the hope in the market that the COVID vaccine will help global fuel demand recover,” wrote AAA spokesman Mark Jenkins in an email.

Added Patrick De Haan, head of petroleum analysis at the price comparison website Gasbuddy.com: “Sure, I’d rather pay a little more and have this COVID thing behind us.” 

Oil prices rose in mid-November, mirroring the pharmaceutical companies that announced plans to begin distributing the COVID-19 vaccine around the same time; oil prices steadily increased from that point on, from $35 a barrel then to $53 in mid-January. At the same time in Florida, gasoline prices rose from $1.99 on Nov. 16 to $2.40 now. 

However, gas prices dropped at the beginning of February. The Florida average dropped 2 cents per gallon this month. Jenkins attributes this drop to rising cases of coronavirus in two of the largest fuel consumers in the world: the United States and China. De Haan suggested that the slow start and errors within the vaccine rollout in the United States will produce a leveling out of that price increase over the next weeks. 

Looking toward the summer, De Haan sees the best-case scenario as gas prices returning to $3 a gallon, marking the reopening of the hardest hit states and releasing people’s pent-up desire to visit restaurants, tourism attractions, sports events, beaches and other recreation destinations. If all goes well with the continuing vaccine rollout, March will see another gas price hike, according to De Haan. 

Photo Credit: Lorenzo/ Patoia/ThinkStock