Gas Prices Continue to Fall in the Aftermath of Sandy
With five refineries lying in the path of Hurricane Sandy when it made landfall earlier this week, there were fears that gasoline prices across the country would jump due to a stoppage in production, but reduced demand in the wake of the storm promises to help keep those prices moving steadily downwards.
With excellent warning of the storm’s approach and meteorological models that proved to be highly accurate, East Coast refineries were also able to take preemptive action by either reducing operations or temporarily closing altogether. (See more: Why Sandy’s Impact Will Differ From Katrina)
The Philips 66 refinery, based in Linden, New Jersey, is one of the country’s largest, with the potential to cause headaches in the oil industry if it were to suffer extensive storm damage. While the plant did see some flooding in its lower areas, the facility’s decision to close in anticipation of Sandy saved it from the worst of the potential damage; it remained offline yesterday as systems were inspected and is expected to begin operations today.
Between the forward-thinking precautions taken by local refineries and the travel-stymieing affects of Sandy as it flooded roads and canceled thousands of flights, the negative effect of the storm on slowly dropping gasoline prices is expected to be surprisingly minimal, welcome news for motorists as they look towards the Thanksgiving holiday and beyond.
“We’re not going to see prices move higher because of this storm. We’re going to see prices move lower,” said Tom Kloza, an OPIS oil analyst. “My guess is we’ll have 20 to 25 states that will have prices below where they were a year ago. It could be in the $3.40s (per gallon) by next week. There’s a huge swatch of the country that’s going to be get closer to $3.” (See more: Do Falling Gasoline Prices Help President Obama?)
True to those predictions, prices at the pump have continued to fall, with a national average of $3.53 per gallon recorded on Wednesday; that price comes in at a cent lower than Monday’s average and a full 11 cents lower than that of last week.