MCALLEN, Texas (ValleyCentral) — Millions of Texans are expected to travel for the holidays as gas prices reach some of their highest levels since the start of the pandemic.
On Tuesday President Biden announced the U.S. would release 50 million barrels of oil from its strategic reserve. The announcement did have an impact on the price of oil.
“Prices are actually up, so, apparently market participants were not overwhelmingly impressed by this release,” said Ehud Ronn, a finance professor with a focus on energy at the University of Texas.
Gas prices are not controlled by the president but by the supply of oil that is available to be refined. Oil production was way down during the pandemic.
“Now it’s back up to 11.1, but we’re still 14 percent below the peak we had two years ago in November,” said Dennis Jansen, a professor of economics at Texas A&M University.
Prices of fuel have been a sticking point as demand returns but supply remains low.
Fuel costs for all sources are up over the last year. “Even natural gas is up 28%, so energy prices are definitely up. And so I can see why there’s concern,” Jansen said.
The United States uses an average of 18 million barrels of oil a day. Ronn said that adding such a small amount of oil to the supply won’t affect the long-term price too much.
“Things that increase substantially the production of gasoline, either domestically or internationally, those are the kinds of things that would have long-standing impact,” he said.
AAA Texas doesn’t expect high gas prices to stop too many holiday travelers.
“Many families may decide to cut back in other areas, but we’re still going to see 92% of those who will travel for Thanksgiving here in Texas will do so by car,” said Daniel Armbruster, a spokesperson for AAA Texas.