If there is one thing that affects gas prices, it has to be hurricanes. With hurricane Ida hitting the Gulf coast, there have been conversations around the looming gas prices increase. There is a chance it will increase after the storm passes. The hurricane hit Louisiana on Sunday. The category 4 hurricane has led to a ton of flash flooding, and it might hit Tennessee. Residents in these areas were warned about potential flash flooding and storms, which might last for days. The immediate concern was for everyone to stay safe. The other issue comes in when people look at the hurricane’s impact on the economy. Gas prices often rise after such a hurricane.
Power Outage Issues in New Orleans
As the hurricane hit New Orleans, there was a power outage in the area. All the power lines were damaged. According to Mayor LaToya’s Twitter page, it would take a while for people to get the power back on. Most people with a backup generator are lucky enough to still keep the lights on in times like these. The looming hike in gas prices has everyone panicked.
Why Do Gas Prices Inflate During a Hurricane?Read More »
With no gas production, the consumers have noticed a close to 10% increase in the gas prices this new week. The reason for this is there is not enough gas being currently produced. Many consumers are buying it in large quantities, which leads to a shortage.
Many experts say there is a high chance that the gas prices will continue to rise as we go into the Labor Day weekend.
Energy Companies Assessing Damage
After the storm hit, energy companies assessed the damage to their sites. The aim was to see the damages and figure out how soon production can start again. Most of the operations along Louisiana and the Gulf of Mexico had been taken offline. It was done as a precaution in case things got worse.
Reports show that the worst-case scenario passed. All that remained was to assess the areas and see how much flooding had taken place. Once the assessment is done and restoration carried out, production could resume. The reserves have gas for the populace but with so many people buying gas, it is difficult to determine how long these reserves will last should the storm go on or a couple more days.
President Biden Asks Saudi for Help
The production levels of 400,000 barrels a day were meant to resume later on Monday. There are high chances that this might take a bit longer. To ensure there is a continuous supply of gas in the US, president Biden has reached out to Saudi Arabia. By doing this, Saudi Arabia would send the extra barrels shipped to them to have enough oil in the United States. Despite his appeal, cartels in Russia will only supply the oil but will do nothing to help reduce the oil prices.
Humans Are the Reasons for the Gas Shortage
According to Patrick De Haan, closing the pipeline temporarily should not cause any shortage. There is enough gas in the storage for such emergencies. The main reason gas shortage happens is that people rush to buy gas that they do not need. There is a fear that they will run out of gas in the middle of the hurricane storm. As such, the gas in reservoirs runs out faster, leading to an increase in prices. Regulations measures are expected to help with the gas prices.
Haan also said that there is no need to worry about massive increasing gas prices. According to him, the price should go up more than 15 cents. He expects the price to stabilize soon enough since the pipeline will open as soon as the damage is repaired and everything is running.
Boston’s gas prices were at $3.05 per gallon, which was 0.1 cents up, while Providence’s price was $3.03 from last week’s $3.01. These prices indicate a big chance there will be no significant gas price surges in the wake of the hurricane.
Motorists Should Brace Themselves
Even though gas prices are yet to rise significantly, there is still a high chance of an increase. Motorists have been advised to brace themselves for any of these possibilities. The pipeline companies plan to assess the situation once the storm passes.
There is no major issue when it comes to the stability of the pipelines. The main concern is that the areas might be badly flooded,hence, taking time for the water to subside before work can resume.
Hurricane Ida Is Not the Worst Hurricane to Hit the Gulf of Mexico
Even though Hurricane Ida has brought with it major damage, it is not as bad as Hurricane Katrina. The damage Hurricane Katrina brought with it devastating losses. Most of the gas inflation that happened back then was significant, hence, many people could not recover from it. It made gas companies more aware of the effects of a storm and prepared better for it. The gas reserves are a great fallback plan for the consumers, and there are high hopes that oil production should resume soon.
Before the storm, gas prices had started to drop significantly, and it was the hope of many that this trend would continue. Motorists are hopeful that the prices will not go above $3 a gallon in most states.