Gas prices decreasing in Southwest Florida as 51 million Americans plan holiday travel

There are no Black Friday deals to be had at the gas pump.

But gas prices are decreasing after an unseasonable spike, good news for motorists traveling for the Thanksgiving holiday.

Prices jumped suddenly Nov. 7, due to a rise in the cost of oil in part caused by the lingering effects of hurricanes Harvey and Irma. In Florida prices rose an average of 13 cents in three days, with some of the biggest hikes seen in Tampa, Orlando and Punta Gorda.

"We saw high demand throughout the country for gasoline. Inventories have really struggled to build since the hurricanes," said Mark Jenkins, a spokesman for AAA - The Auto Club Group in Florida.

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While gas prices are higher than a year ago, it won't stop Floridians or Americans from hitting the road for the holidays.

AAA projects nearly 51 million Americans will travel 50 miles or more from home this Thanksgiving, a 3.3 percent increase over last year. That would be the highest travel volume for the holiday weekend since 2005. 

"I wouldn't anticipate current gas prices making the difference between a go and no-go situation for motorists," Jenkins said. "If anything, people could just reallocate some of the money in their travel budget to gas, maybe spend a little less on food or shopping." 

Visiting loved ones often "trumps everything," he said.

"Most people have their travel plans laid out," Jenkins said. "Some minor shifts in gas prices aren't going to change that."

Crude oil prices have cooled after hitting the highest level in more than two years less than two weeks ago. Futures, which were trading at about $57 a barrel, are closer to $56.

"Increasing crude oil prices almost always lead to higher prices at the pump," Jenkins said. "Expensive crude makes it more costly for refineries to produce gasoline, and that price is typically passed along to the consumer."

Several factors caused higher oil prices, including declining rig counts in the United States, lower domestic oil inventories, news of OPEC's plans to extend an oil production cut agreement and worries about political instability in Saudi Arabia. 

The good news for Floridians is that production at Gulf Coast refineries, which supply much of the state's gasoline, is returning to normal.

"There are no lingering effects of the hurricanes anymore that's hurting that region so supplies are building and oil prices are beginning to come back down," Jenkins said.

Wholesale gas prices from Gulf Coast refineries recently dropped by 25 cents a gallon, but that savings won't show up right away at that pump, as older, more costly supplies still must be sold out, Jenkins said.

Oil prices are improving as rig counts and oil inventories rise in the U.S. Every dollar shift in oil prices leads to a 2.5-cent-per-gallon adjustment in gas prices at the pump in the same direction, Jenkins said. 

"We are forecasting that gas prices should decline from 5 to 10 percent by Thanksgiving weekend," he said. 

While the demand for gasoline will be high for holiday travel, the competition among gas station operators will help keep prices in check, as they try to outdo each other in hopes of luring more customers into their retail stores for other purchases.

"They don't always profit from selling gasoline," Jenkins said. "Where their profits come from is concessions — hot dogs, water, cigarettes, beer and all that stuff."

On Saturday Florida's average gas price stood at $2.50 a gallon. That compared to $2.54 nationally and in Collier County. In neighboring Lee County, the average was a few cents lower — at $2.47.

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A year ago, prices were much more affordable after dropping an average of 14 cents in the first 26 days of November, Jenkins said.

The state average was at $2.11 a gallon on Nov. 18, 2016. In Naples it stood at $2.20 and reached $2.17 on Nov. 28 after prices fell 12 cents in 29 days, Jenkins said. 

While gas prices are stabilizing after the recent spike, Kevin Doyle, executive director for the Consumer Energy Alliance of Florida, said the recent swing points to the need to encourage more oil production in North America and to reduce the dependence on oil from other countries.

"It's a wake-up call to make sure we pursue good energy policies," he said.