Posts tagged “Hurricane Sandy”
Social media is picking up where more official sources for fuel are leaving off by necessity, resulting in a gray market that is seeing residents of hard hit New York and New Jersey paying up to $100 for five gallons of gasoline.
While complaints of price gouging are greatly centered on gas, they also extend to items like matches, batteries, food, generators, and even water. Most items are being offered by unscrupulous citizens on those popular online platforms, requesting everything from high prices to sexual favors in return for the goods. (Read More: Gas Prices Keep Falling, Survey Shows)
A combination of the effects of a fall in California pump prices, the reduced demand caused by the fuel shortages seen in the aftermath of Hurricane Sandy, and lower crude prices have led to the most substantial drop in gas prices seen in the United States since 2008.
Down an average of 20.75 cents since October 19, the average price at the pump across the country now stands at $3.54 per gallon.
Throughout the New York City area, would-be drivers are finding themselves without gasoline as the city and region struggles to get its infrastructure back online and reconnect with the outside world following the widespread damage caused by Hurricane Sandy. (See more: Gas Prices Continue to Fall in the Aftermath of Sandy)
Ironically, the problem faced by commuters looking to fill up isn’t a shortage of gas itself, but rather a lack of electricity to stations, rendering them unable to pump gas from underground tanks. According to a report issued by AAA, more than 60 percent of stations in New Jersey and more than 70 percent of those in hard-hit Long Island are now closed, forcing those searching for fuel to descend on the few stations still able to deliver their product. CONTINUE»
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)
As Hurricane Sandy bears down on the East Coast, a lot of prognosticators are offering up predictions for what it means for gasoline prices in that market. I thought it might be of interest to note the differences in Hurricane Sandy and Hurricane Katrina concerning the oil and gas markets.
Hurricane Sandy has already reduced refining capacity in the Northeast, and the possibility exists of extended outages if any of these refineries take significant damage from the hurricane. Gasoline and heating oil inventories in the area were already very low, and this increases the chances of sharp gasoline spikes across the area. However, these spikes are expected to be short-lived and localized, as the area also receives gasoline from Europe and from the Colonial Pipeline, which brings supplies to the East Coast from the Gulf Coast. As long as refinery outages are not prolonged, the gasoline markets should return to normally fairly quickly. However, people would be wise to make sure their cars are topped off with gasoline and that their heating oil supplies are adequate.
Hurricane Katrina presented a double-whammy for the oil and gasoline markets. When it tore through the Gulf of Mexico, it seriously damaged a lot of oil producing infrastructure that is critically important for the U.S. fuel supply. When Katrina made landfall, it damaged a number of refineries. The result was a shortage of oil capacity — which drove oil prices much higher — and a shortage of gasoline both from the oil shortage and the refinery outages. The oil capacity problem could not be quickly resolved, and as a result oil and gasoline prices remained higher for months. Because the Gulf Coast refineries supply gasoline to many markets, these high prices impacted the entire U.S. market. CONTINUE»
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)