Sandy’s Effect on Fuel Prices Should be a Positive One
While most hurricanes and tropical storms that make landfall in the United States have an effect on gas prices that consumers are unhappy with, the projected path of Hurricane Sandy and its causing of decreased fuel demand could actually help to continue to push gas prices lower around the country.
The entire northeastern part of the nation is currently locked down as nearly 70 million people brace for Hurricane Sandy, a complicated system that is growing ever larger as it merges with existing wintry cold fronts. This has included a temporary stoppage of transit services in New York City and a mandatory evacuation order of hundreds of thousands of coastal residents across several states. (See more: Falling Gas Prices Could Hurt Romney Campaign)
While those in the scope of the storm’s path brace for impact, people in other parts of the country are likely to benefit from the storm’s depressing of regional fuel demand in an area that is a major net consumer of refined fuel products. While a bearish outlook saw prices rise marginally this morning in many areas, analysts expect that the lowered demand and the expected safety of the many refineries clustered in New Jersey and Pennsylvania will see costs at the pump at some of their lowest points later this week.
“While motorists would expect gas prices to surge with Hurricane Sandy headed for the East Coast, the storm has not yet caused prices to spike,” said AAA spokesperson Jessica Brady. “Despite Sandy, retail gas prices are forecast to fall further this week and the downward trend is expected to continue into the Thanksgiving holiday.” (See more: The Potential for a Heating Oil Crisis)
How exactly Sandy’s effect on fuel prices will pan out remains to be seen; while low, the risk to local refineries does exist, and the expected drop in demand by the region’s residents will just as suddenly increase as its residents work to get their cities and towns moving again later in the week.