TYLER, Texas (KLTV) - Gas prices have stayed steady despite Hurricane Laura hitting the Gulf last week. AAA reports that statewide the average price of regular unleaded gas is $1.91. This labor day, AAA expects the price of one gallon of regular unleaded gasoline to be cheaper than it’s been for sixteen years, since 2004. This is one of the results of the current oversupply of crude oil on the global market.
“We are literally awash in crude oil right now,” says Dr. Harold Doty, a Professor of Management at the University of Texas at Tyler. He explains how low gas prices are great for everybody except those with a tie to the oil industry.
“So what we see is reduced employment in the industry, we see people out of work, and we see that the service industries, around the oil industry itself, and around production shut down which further exacerbates the problem,” he says.
In April, oil prices crashed as a result of the excess supply and the stay at home orders. Since then, there’s been a small increase in oil consumption, but Dr. Doty says the oil industry won’t even begin to really recover until next year saying “when things go back to normal, when the economy opens up, when we’re free to travel and go back and forth to work. What we should see is about a 15% global increase in crude oil consumption and that’ll begin to stabilize prices and put some upward pressure on gasoline prices.”
Dr. Doty says some oil companies have been able to hold off on letting people go, but if the oversupply doesn’t decrease then we might soon see an increase of unemployment in the oil and gas industry.