TS Isaac to Push Current Gasoline Prices Even Higher for Labor Day

Experts anticipate the impact of Hurricane Isaac on the Gulf Coast to have many other effects, such as a sharp rise in current gasoline prices throughout the upcoming Labor Day weekend.

Even if the tropical storm missed the U.S. coast, it  will still hit the wallet of consumers. As it heads toward the Gulf Coast, a lot of refineries are closing.

There are so many factors affecting current gasoline prices, including weather conditions such as Isaac. Even if somebody does not know anything about the prices at the pump, almost everyone understands that, in case a hurricane hits the Gulf Coast, the production in the region’s refineries will also be affected. Consequently, that affects gasoline prices as well, said research economist Dr. Robert Salvino.

Louisiana and the entire Gulf Coast are known for oil production. With the looming storm, ten percent of the area’s oil platforms will close, according to experts. It isn’t just fuel production that will slow down, because a lot of refineries will cease their operations alltogether as well.

Despite the limitations of a portion of the supply, demand will go on relatively unchanged. As a result, gasoline prices today in the region are expected to move even higher, especially during a holiday weekend known for greater demand and increased prices at the pump.

With more demand, prices increase automatically, and in this particular scenario, production and availability of fuel will decline, according to AAA branch manager Tracie Lawrence.  On the positive side, South Carolina has the lowest gasoline prices today throughout the country.

Although the short term impact is shocking, if refineries are not hit and the storm passes without causing any major destruction, any effect on prices of gasoline seen during the upcoming holiday weekend will quickly wear off.

By: Chris Termeer

Chris Termeer

Chris Termeer is an oil and gas consultant, industry commentator and analyst. His book, Fundamentals of Investing in Oil and Gas provides a comprehensive overview of all aspects of the oil and gas industry, including exploration, drilling, production, storage, transportation and refining, to name but a few.

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