Get ready for higher gas prices, thanks to Hurricane Ida
After drifting downward in recent weeks, gas prices could rise 10 cents to 20 cents more per gallon as refiners inspect damage to oil rigs and refineries after Hurricane Ida, analysts said.
How high prices will go from here remains to be seen, said AAA spokesman Mark Jenkins, writing in the club’s weekly Gas Price Update.
“Based on overnight movement in the futures market, a 10- to 20-cent jump at the pump is not out of the question,” Jenkins wrote. “Where gas prices go from here will depend on the extent of the damage and how long it will take for fuel production and transportation lines to return to normal.”
All eyes were on refineries in Louisiana, Mississippi, Texas and Alabama, which account for more than 45% of the nation’s capacity for refining crude oil into gasoline, as well as 2,000 oil rigs in the Gulf of Mexico.
More than 90% of the rigs and four of nine refineries were shut down as a precaution prior to the storm, AAA said.
The good news for consumers is that futures traders were taking a wait-and-see approach on Monday. A barrel of West Texas Intermediate Crude was trading at $68.83 on the New York Mercantile Exchange just before noon. That’s less than 1% above Friday’s closing price of $68.74.
Prices last week increased 11% in anticipation of Ida’s impact after opening at $61.96 on Aug. 23. Softening consumer demand had caused crude oil prices to decline through August.
Patrick DeHaan, senior analyst at price comparison website GasBuddy.com, said chances of a massive surge in gasoline prices are “extremely low” because of lower crude oil demand and the precautionary shutdown of two lines of the Colonial Pipeline before the storm. Still, he forecasts per-gallon gas prices to rise between 5 cents and 15 cents.