CNN reports that gas prices have hit a five-year low after falling for seven straight days. The AAA has the nation's average gas price at $1.630 a gallon. A year ago gas prices were just over the $3 mark and earlier this summer they hit a peak of $4.114 a gallon. The $1.630 average is the lowest we have seen gas prices since February 18, 2004 when they were $1.63.
Today, the AAA has gas prices down again to $1.627 which is even lower than the Feb. 18, 2004 number. You can find the AAA's Fuel Gauge Report here.
Nissan plans to release the eco pedal in 2009. The Detroit Newsreports that the pedal helps to improve gas mileage by calculating the most efficient rate of acceleration. The pedal can be shut off if it is annoying the driver.
It calculates the most efficient rate of acceleration in a vehicle based on how fast fuel is being burned and other factors and causes the gas pedal to push back to alert overzealous drivers.
Nissan says the system is designed to help drivers become more fuel efficient behind the wheel.
Lifehacker reports on the launch of a new social media website called Fuelly. The service lets you track the car mileage on your car by entering data each time you fill up your car. A mobile version is available so you can quickly add your gallons purchased and miles driven right after you fill-up.
Sign up for Fuelly and add your car's make, model, and year to your Fuelly "garage." Fuelly will display the EPA's MPG estimates for your car (average, city, and highway). Then, each time you fill the gas tank, you record the number of gallons you've purchased and the number of miles you've driven since the last fuel-up in Fuelly (which offers an iPhone-friendly version too). Fuelly will track your MPG over time, as well as your friends' and other members, and even track which user has had the "best tank" on a per model basis. Overall the point of Fuelly is to make saving fuel more fun by connecting your stats with your friends, and at this early point in its life, it does a pretty great job.
Once a lot of people have signed up for Fuelly the service will probably have some interesting aggregate data to offer. Fuelly was launched by MetaFilter founder Matt Haughey. There's a 3-minute tour of Fuelly available on the Fuelly.com homepage.
Consumers only recently got used to seeing the $3 mark at the pump. This year they have been surprised to see prices breaching the $4 a gallon mark just for regular and some drivers have grudgingly acknowledged that $5 is a possibility in the near future. But what if gas just keeps going up and up and up? What if it hits $12 a gallon and there are severe gas shortages? That's a likely possiblity according to Robert Hirsch, the Senior Energy Advisor for Management Information Services. Hirsch made his frightening prediction on CNBC's Squawk Box.
"[T]he prices that we're paying at the pump today are, I think, going to be 'the good old days,' because others who watch this very closely forecast that we're going to be hitting $12 and $15 per gallon," Hirsch said. "And then, after that, when oil - world oil production goes into decline, we're going to talk about rationing. In other words, not only are we going to be paying high prices and have considerable economic problems, but in addition to that, we're not going to be able to get the fuel when we want it."
Hirsch told the Business & Media Institute the $12-$15 a gallon wasn't his prediction, but that he was citing Charles T. Maxwell, described as the "Dean of Oil Analysts" and the senior energy analyst at Weeden & Co. Still, Hirsch admitted the high price was inevitable in his view.
"I don't attempt to predict oil prices because it's been impossible in the past," Hirsch said in an e-mail. "We're into a new era now, and over the next roughly five years the trend will be up significantly. However, there may be dips and bumps that no one can forecast; I wouldn't be at all surprised. To me the multi-year upswing is inevitable."
At those kind of prices the way the U.S. runs its cities and highways would not be feasible. An alternative fuel would be needed or new means of transporting people to and from work, grocery stores and shopping malls would be needed.
The Associated Press has a clip about how some people are using the web to save money on gas prices. In this case people are using Craigslist to find carpoolers. The AP video suggests you meet in a safe place - you don't want to share a ride with a dangerous person.
The higher gas prices get the more likely thieves are going to try to siphon fuel from buses, cars and trucks. This Associated Press video describes a few incident of fuel theft in Maryland. In addition to losing valuable gasoline a punctured gas tank can also be very dangerous. This article describe a few prevention tips such as buying a locking gas cap.
In the CBS News video below reporter John Blackstone reports from a scenic, remote and expensive gas station in California. The gas is $5.19 a gallon for regular at the Americo gas station in Gorda, California. They won't even list the price on their sign because it is so expensive. The next stop Big Sur is forty miles from Gorda so many drivers have no choice but to fill up.
Reuters reports that gas prices have climbed to nearly $3.20 for a national average. Experts believe gas prices have much higher to climb still with another 20 to 30 cent increase to come in April.
Gasoline prices are rising sharply as refiners, who have kept prices down in order to compete for sales, become more willing to pass on their higher costs of crude oil, according to an industry analyst on Sunday.
The national average for self-serve regular unleaded gas was nearly $3.20 a gallon on March 7, up about 9.44 cents per gallon in the past two weeks, according to the nationwide Lundberg survey of about 7,000 gas stations. The price has risen 64 cents per gallon in the past 12 months.
"The price increase was entirely due to the higher costs of crude oil," said survey editor Trilby Lundberg.
Although the latest price represents a nominal all-time high, when adjusted for inflation it is a smidgen below the record of $3.18 per gallon reached on May 18, 2007, Lundberg said.
Lundberg said things will likely get worse, with prices at the pump rising 20 to 30 cents per gallon in the next month as refiners begin passing on to customers more of their higher costs for crude oil.
With the cost of oil now hitting $107 a barrel it is possible that the national average gas price could eclipse the $4 a gallon mark during the summer driving season.
The AAA's Fuel Guage Report has the nationwide average price at $3.222 - just one half cent short of the all-time record high of 3.227 that was set on May 24, 2007.
Analysts Expect Gas Prices of $3.5 to $4 This Summer
With oil over trading over $100 a barrel many analysts are projecting gas prices to soar to record levels this summer with a peak in May or June. The Associated Pressreports that predictions range from $3.5 to $4 a gallon for the peak national average gas price. That would be a good 25 to 75 cents above last year's record of $3.227 a gallon.
Many analysts believe gas prices will rise this spring to new records near $3.75 or $4 a gallon. But not everyone agrees.
Ritterbusch, for example, thinks the high level of supplies, and an eventual decline in oil prices, will pull pump prices down. He doubts prices will rise as high as $3.75 without a major overseas supply disruption or domestic refinery outage.
But Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service in Wall, N.J., argues that while gasoline prices won't rise as much this spring as they have in previous years, they are starting from a much higher level. Indeed, prices at the moment are 83 cents higher than a year ago. That means retail prices could peak between $3.50 and $3.75 a gallon, Kloza said, well above May's record of $3.227 a gallon.
The Energy Department's latest forecast calls for gas prices to peak near $3.40 a gallon this spring.
Of course, gasoline prices also respond to oil futures. Oil has traded in a band between about $86 and $100 a barrel for months, a trend many analysts expect to continue throughout the year. That will likely keep gas prices oscillating in their own narrow band around $3 a gallon for most of the year.
Any unexpected activity like a bad hurricane season or a disruption in the oil supply would spike gas prices even higher than these already ugly predictions.
The latest Lundberg survey of nationwide gas prices shows prices have shot up 10 cents. The Lundberg survey of 7,000 gas stations reports that the average price of regular gasoline on Friday was $3.07 a gallon, mid-grade was $3.19, and premium was $3.30. San Francisco has the highest prices at $3.39 for regular. Fox Business News says Lundburg the increase is due to higher crude prices and profit margins.
Gas prices may be starting to weigh down U.S. consumers. The gas prices have been hovering at or above $3 for what seems like forever. The problem is gas prices are at $3 now and we are still months away from the peak driving season. CNN reports that consumers are starting to show some real resistance to the high prices but it is unclear whether it is the prices themselves or the weakening economy that is causing the reduced spending.
"With prices over $3 a gallon, there seems to be some real resistance from the consumer," said Michael McNamara, director of research for MasterCard SpendingPulse.
In some weeks demand has fallen by as much as 3 percent.
Although the public has seen $3 gasoline before, 2007 has been different. Where previous price spikes were short-lived, this one seems to be here to stay.
Another reason demand is falling could be due to a slowing economy, or even fears of a recession.
Since topping $3 back in April, gasoline has stayed consistently high, with the nationwide weekly average price never dropping below $2.70 a gallon, according to the Energy Information Administration. For 19 of the last 33 weeks, gasoline has averaged over $3 a gallon.
If gas prices soar as they always do in March, April and May than U.S. consumers could be in for a historically painful experience at the pump. Let's hope somehow the oil prices drop well before that dreaded period begins.
We have launched a gas prices twitter profile which provides gas prices news and trends. Twitter is a microblogging service and communication tool that allows you post short 140 character updates. To get our updates on Twitter you need to join Twitter and then follow our Twitter profile.
Nationwide U.S. gas prices recently broke the record nationwide average gas price of about $3.07 per gallon. Despite breaking the record gas prices have kept on climbing. The chart on the right is a graph from the Fuel Gauge Report. It shows prices soaring right past the old record. Today gas prices are already ten cents above the old record at a nationwide average price of $3.18.
Despite the all-time high gas prices consumers are not letting up on driving primarily because they have little choice. Commuters have not choice but to endure the painful pump prices because they have to get to and from work. Gas prices will likely break the $4 mark in some cities.
And brace yourself: experts say with gas already closing in on $4 a gallon in Chicago and San Francisco ahead of the peak summer driving season, higher prices could be in the cards.
Most Americans are locked into their driving habits and can do little to alter their fuel-buying patterns when prices rise, experts say. For example, the number of workers with commutes lasting longer than 60 minutes grew by almost 50 percent between 1990 and 2000, according to Census Bureau data.
"I drive 55 miles each way to work every day," Sandy Colden, of Medford, N.J., said one recent morning while loading groceries into her Honda Pilot SUV. "So I really don't have a choice, unfortunately."
A Reuters article says today's high gas prices have even matched the "inflation-adjusted peak reached in the early 1980s during the Iran-Iraq war."
Gas prices are likely to climb much higher as we move into the summer driving season. An ABC article has quotes from Phil Flynn, vice president and energy analyst at Alaron Trading. Flynn sees gas going much higher -- possibly even hitting the $4 a gallon mark.
"Things are looking pretty bad for the upcoming summer driving season," said Flynn, citing a new government report showing that the U.S. stockpiles of gasoline fell by 5 million barrels in the past week, much more than analysts were expecting.
Flynn said he believes gasoline prices will head into record territory -currently a nationwide average of $3.07 - by the height of the summer season.
"This is the time of year when we're supposed to be building supplies, but it seems like the refiners just can't get ahead of what has been very, very strong demand," he said.
Today's report shows that the national supply of gas is at the low end of its average range for this time of year, meaning the United States will have less gas in the tank before the peak summer driving season in the coming months.
Iran's release of the soldiers is great short term news but it won't diminish the building pressure on gas prices. Flynn told ABC that, "Everyone asks me, will we see $4 a gallon? And the answer is, there is a strong possibility that we may see $4 a gallon."
Reuters reports that gas prices jumped 31 cents this past month. According to the AAA's Fuel Gauge Report the average national gas price is now $2.48 -- that's about 20 cents higher than this time last year. You can find more gas prices resources here.
The government says motor fuel costs have soared 31 cents over the past month to $2.51 a gallon because of the rise in crude oil prices, which accounts for half the cost of making gasoline. Most of those higher crude prices have been passed on to consumers at the pump.
Pushing up gasoline prices in the weeks ahead will be stronger fuel use as highway travel gets a spring boost.
"Fuel demand increases, that puts upward pressure on prices," said Tancred Lidderdale, an analyst with the U.S. Energy Information Administration, the Energy Department's analytical arm.
Refineries will also switch to less-polluting gasoline required by the government during warmer months, which costs more to make and adds five to seven cents at the pump, according to Lidderdale.
The EIA will revise up its estimate of $2.41 a gallon for the average gasoline price for the second quarter when the agency releases its new monthly forecast on Tuesday, he said.
The gas price jump comes as we enter the spring/summer driving season. Prices typically jump this time of year but they are still way above the prices consumers were used to several years ago. The article also says if the economy is very weak consumers may reduce their driving and spend less money on gas which would keep prices from rising as fast.
Gas prices are starting to climb again and we will soon enter the period between March and May when gas prices tend to really spike. Michigan drivers have also seen prices climbing at the pump. A Detroit Newsstory explaions how drivers in Michigan could soon be seeing those annoying $3 figures at gas station.
Pump prices are more than a dime higher than at this time last year, fueling concerns that Michigan drivers again could soon pay $3 a gallon -- as they have the past two summers.
"Things might stay stable for a week," said AAA spokesman Jim Rink, noting prices are only up 3 cents from a week ago. "But once we get into March, prices will go up and hit a peak in late May."
Rink said it's not a certainty that prices will top three bucks, but the fact they reached that level the past two years shows the market can sustain that price during the summer driving season.
The higher cost to make summer fuel, higher gas demand and speculators -- those who buy and sell oil as an investment -- push pump prices higher during the spring months, Rink said.
The AAA's Fuel Gauge Report shows the national average price for gasoline up about 11 cents over last month.
The Associated Press reports that gas prices are headed back up again after a few months where gas prices have been down about 70 to 80 cents from the highs for the year.
Gas prices are on the rise again, just as Americans hit the highways for Thanksgiving.
Gas prices rose about 5 cents per gallon nationwide compared to two weeks ago, industry analyst Trilby Lundberg said Sunday.
The national average for self-serve regular was $2.23 Nov. 17, according to Lundberg's latest survey of 7,000 gas stations across the country.
The national average for midgrade was $2.34, while premium was $2.44 per gallon.
The AAA's Fuel Gauge Report is showing an uptick of about twelve cents this month. $2.235 for November compared to $2.214 in October.
Down seems like an accurate prediction for gas prices given the pleasant lack of major hurricanes in the Gulf of Mexico so far this hurricane season. However, a USA Todayarticle cites an expert that thinks we will be closer to $2 than $3 by Thanksgiving.
The only place they have to go is down," says Fred Rozell, gasoline analyst at the Oil Price Information Service (OPIS). "We'll be closer to $2 than $3 come Thanksgiving."
Travel organization AAA foresees prices 10 cents a gallon lower by the end of next week. It reported a nationwide average of $2.84 Tuesday, the lowest since April 20.
It's good news for consumers and the economy. Continued lower prices "may act like a tax cut" and stimulate spending, says Richard DeKaser, chief economist at National City in Cleveland. He calculates that higher energy prices the first six months cut growth of consumer spending 1 percentage point.
The U.S. average for a gallon of regular peaked this year at $3.036 Aug. 10, according to OPIS/AAA daily surveys. That's slightly under the high of $3.057 Sept. 5, a week after Hurricane Katrina battered petroleum production in the Gulf of Mexico and caused fears of fuel shortages.
It is great to see gas prices dropping but as far as the $2 gas goes we'll believe it when we see it. Until then we are skeptical. We are also concerned the prices are just going to jump right back up to around $3 once the temperatures warm up again next spring. Some resources for tracking gas prices can be found here.
A computer glitch at a Stop 'n Go gas station in Rockford, Illinois resulted in some very happy customers. The glitch brought gas down to $0.309 a gallon or about 31 cents a gallon. The Rockford Register Star says people were filling up their gas tanks for under $5.
"Everybody was filling up for under $5," said gas station attendant Tracy Moore, who wasn't immediately aware of the problem. She contacted her boss, who ordered all the pumps to be shut down.
Moore said she did not know how many vehicles filled up their vehicles at the reduced rate, but long lines were common as word of the cheap gas spread through town.
"It was just very scary being bombarded like that," Moore said. A line spilled out of the gas station island onto Charles Street. "Even the (neighboring) Sandwich Factory called me up and said, "Tracy, you’ve got a line."
Now if we could just find a way to make this the real price of gas.
CBS 3 reports that a Lundberg Survey has found that the average nationwide gas prices has hit a new all-time high of $3.0150 per gallon. This broke last year's record.
Nationwide gas prices hit an all-time high in the last two weeks, rising nearly 2 cents to just over $3 per gallon, according to a survey released Sunday.
The national average for self-serve regular stood at $3.0150 a gallon Friday, up 1.98 cents in the last two weeks, according to the Lundberg Survey of 7,000 gas stations across the country.
The price exceeded the previous high of $3.0117 set in September last year, analyst Trilby Lundberg said.
AAA's Fuel Gauge Report has the nationwide average at $2.98 which is below their recorded record of $3.057 on September 5th, 2005.
Oil has soared as a result of the new Middle East crisis. Prices peaked at $78 a barrel before settling over $77. If oil prices stay at these levels then consumers can expect unwanted new records to be set at the pump. An AAA Texas spokeswoman explains in a bizjournals.com article.
"For the second time in as many weeks, the price of crude oil climbed into record territory. This time, above $76 a barrel," said AAA Texas spokeswoman Rose Rougeau.
"Escalating tensions in the Middle East have renewed fears that supplies from the region may be disrupted. If crude stays at or near these levels for an extended period of time, retail gas prices will soon follow, because demand remains strong. And motorists will see new record prices at the pumps," she adds.
The national average for regular self-serve gasoline is $2.96 a gallon -- up two cents from last week.
Some resources for gas prices can be found here. Unfortunately, the gas prices are likely to continue to increase this summer if things are not resolved quickly between Israel and Hezbollah.
MSNBC.com has an article that lists eight reasons why gas prices could continue climbing. Some of the reasons include ethanol production costs, tight inventories, demand, summer driving and oil futures speculation. As always Mother Nature is the wild card.
8. Mother Nature: Though it's impossible to predict just how bad this hurricane season will be, the odds are against the kind of devastating damage seen last fall in the relatively small Gulf Coast corridor that produces nearly half of U.S. gasoline supplies.
But it wouldn’t take another direct hit by a Category Five storm to sent pump prices higher. Hurricanes and severe tropical storms anywhere in the Gulf would likely interrupt shipments of crude oil to refineries as well as tanker shipments of gasoline to local market.
And any spot shortages can be counted on to produce short-term local spikes in pump prices.
Hopefully, we will not see a major hurricane in the Gulf of Mexico again this Summer or Fall but even the threat of another significant storm could send oil futures soaring.
The Associated Press reports that the U.S. national average regular gas price has jumped 11 cents in two weeks to near $3 a gallon.
U.S. gas prices jumped nearly 11 cents per gallon in the past two weeks with the national average for self-serve regular just shy of $3 a gallon, according to a survey released Sunday.
The average price for the grade was $2.995 per gallon Friday, up 10.73 cents in two weeks, according to the Lundberg Survey of 7,000 gas stations across the country. The price was less than 2 cents below the all-time high of $3.01 set Sept. 9, analyst Trilby Lundberg said.
The AAA's Daily Fuel Guage Report has nationwide prices at $2.962, which is over 70 cents higher than one year ago.
Gas Rage: Customer Complaints About Gas Prices Get Uglier
An article on AOL.com says some people are unable to control their anger when filling up their vehicles with the high priced fuel at gas stations. Many are taking their anger out on the gas station owners. Some are yelling and/or driving away without paying for the gas.
"Everyone is suffering at the same time," said Sam Shirazie, a clerk at a Chevron station east of downtown Los Angeles. "If I could help to reduce that pain, I would."
No detailed statistics are kept on incidents of gas rage. But the National Association of Convenience Stores said anecdotal evidence indicates they have increased since prices began climbing in February.
Employees of Fleming Corp., which operates 14 gas stations in Kansas and Missouri, have heard everything from "just a mumble-grumble kind of thing to a cheap shot or blaming the clerk for world oil prices," owner Ed Roitz said.
Division manager Ron Davis hears complaints firsthand.
"Out of all our customers, probably 1 percent does the loudest squealing," he said. "I don't want to repeat some of it. They'll talk about the blankety-blank oil companies."
The article says that some gas station owners have tried to diffuse customer outrage by posting humorous signs or giving away free sodas to customers that buy over $20 in gas.
Not everyone is rushing to buy a new hybrid. An MSNBC.com article SUV models like the SRX and the Cadillac Escalade are still in demand by consumers that appear more concerned with the type of vehicle they buy then the gas mileage it gets.
With all the histrionics about rising gas prices coming out of Washington these days, SUVs must be an endangered species in our nation's capital, right? Well, not exactly. At Capitol Cadillac, just inside the Beltway, SUVs are flying off the lot. Last week, former White House chief of staff Andy Card dropped by to pick up a new SRX, Caddy's midsize SUV, says dealer Daniel Jobe. But Jobe's hottest seller, by far, is the newly redesigned chrome-encrusted Cadillac Escalade, an incredible hulk that gets 13mpg in the city. "My biggest problem is not gas prices," says Jobe, "it's getting enough of these trucks."
The article says manufacturers are also still making cars that guzzle gas despite the higher gas prices.
One in four new models today comes equipped with a gas-thirsty V-8 engine—which is unchanged from last summer, before gas prices spiked, according to new data from J.D. Power. And some of the best-selling rides on the road today are GM's trio of beefy new SUVs—the Chevy Tahoe, the GMC Yukon and that blingy 'Slade, which saw its sales surge 127 percent last month. Meanwhile, last year's "it" car, the hybrid, is becoming a harder sell. Sure, dealers are still selling out of the Prius, but sales of the Honda Accord hybrid plunged 69 percent last month and Ford had to resort to a zero percent financing deal to jump-start its Escape hybrid. For all their megawatt buzz, hybrids still account for just 1 percent of U.S. auto sales and are outsold by SUVs 23-1. "Not a lot of people are jumping up to pay $3,000 extra for a hybrid," says Memphis Toyota dealer Kent Ritchey. "For $3,000, you can buy a lot of gas."
It is good to see consumers still buying vehicles but it probably indicates that the demand for gas in the U.S. isn't going to be decreasing anytime soon. Not as long as people are still happily buying vehicles with gas mileage as bad as 13mpg.
Gas Prices Have Consumers Considering New Vehicles
The latest report from AutoVibes says that rising gas price are having a big impact on consumers. Many new car buyers are considering vehicles that get better gas mileage including hybrids. AutoVibes found that more than 62 percent of new-vehicle shoppers are strongly considering the purchase of a vehicle they normally would not have considered, and 30 percent say they already have changed their minds about what vehicle they are going to buy. AutoVibes is a monthly automotive study from Harris Interactive and Kelley Blue Book Marketing Research tracking consumer automotive buying intentions
"The new data from the latest AutoVIBES study provides insight into consumers’ future buying intentions," said Rick Wainschel, vice president of marketing research and brand communications for Kelley Blue Book. "Extreme shifts in segment consideration levels reveal just how profound the impact of recent increases in gas prices is on consumers and their vehicle purchase behaviors. This information will be an important bellwether of the long-term effect of this issue on new-vehicle shoppers."
These preliminary April 2006 AutoVIBES data also show an increase in awareness of alternative fuel vehicles. Sixty-six percent of consumers are aware of E85 (a mixture of 85 percent ethanol and 15 percent gasoline), and 59 percent are aware of flex-fuel vehicles (those that can run on either regular gasoline or E85). The April awareness levels for both E85 and flex-fuel vehicles jumped a significant number of points over the previous month (E85 and flex-fuel awareness levels were at 60 percent and 55 percent in March 2006, respectively).
"With gas prices on the rise and continuing to climb, consumers are more aware of and interested in highly fuel-efficient cars now than they have been in the last 25 years," said Jack R. Nerad, executive editorial director and executive market analyst for Kelley Blue Book and kbb.com. "We expect to see increased consumer interest for some of the recently-introduced fuel-efficient sub-compact vehicles such as the Toyota Yaris, Nissan Versa and Honda Fit, in addition to hybrid, flex-fuel and compact models."
Here are some of the trends for specifici vehicles. As you might expect hybrids are trending much higher while SUVs are trending lower.
Consideration for compact sedans is at an all-time high at 19 percent, up four points from the previous month.
Hybrid vehicle consideration also reached an all-time high in April at 14 percent, which is more than double the percentage of consumers that were considering hybrids last month. (Six percent considered hybrids in March 2006).
In contrast, consideration for mid-size SUVs is at an all-time low at 19 percent, and full-size pickup consideration also is down considerably at 11 percent, a 5 point drop from the previous month.
The complete report from AutoVibes can be found here.
Gas Buddy has an interesting map called the USA National Gas Temperature Map. The map shows what gas prices are like around the country with the darker greens being the cheapest and the oranges and reds indicating where gas prices are the most expensive. A quick look at the map shows that prices are highest out west, especially in California. There are also high prices on the Northeast coast and in Southern Florida. What's really great about the map is that you can zoom in to focus on specific locations. If you want local prices in Chicago simply grab the map and move Chicago onto the center of the screen and zoom in. You will quickly notice there are some dark orange high prices surrounding the city of Chicago. If you right click on the map it will tell you the local average gas price. The map is a service of GasBuddy.com, which offers search tools and price data to help people quickly find low gas prices in their zip code.
A New York Daily Newsexplains how $100 a barrel oil and $5 gasoline is a realistic possibility.
"There's so much that could go wrong right now," said Phil Flynn, an energy analyst at Alaron Trading in Chicago. "This is the scariest time we've seen in oil in a long period of time."
In addition to the looming showdown with Iran over its nuclear ambitions, terrorists have repeatedly threatened to attack oil infrastructure in Saudi Arabia; Nigerian rebels have disrupted exports by 25%; Iraq is pumping out 30% less crude than it did before the war; production in the Gulf of Mexico has yet to return to normal after Hurricanes Katrina and Rita, and Bolivian President Evo Morales yesterday seized control of the country's oil and gas fields and gave foreign companies 180 days to agree to new deals with the government.
"We're on a hair trigger," said John Kilduff, senior vice president of energy risk management at Fimat USA, a New York commodities trading firm.
"Unfortunately for consumers, we're on the brink of [$100 a barrel] as we speak," he said. "It's been a parade of horribles."
Consumers are already extremely unhappy at $3 a gallon. It is hard to imagine what the reaction to $4 or $5 a gallon gas would be but it would not be pretty.
The New York Daily Newsreports that a gas station in Brooklyn hit $4.50 a gallon for premium. Regular was listed at $4.14. The price didn't go over very well with local customers.
That's what the Gulf Station on Old Fulton St. in Brooklyn Heights was charging credit card customers for a gallon of premium yesterday.
A gallon of regular gas was no bargain, either, at $4.14 for cash or $4.26 on plastic.
"That's crazy," said Mike Charles, 49, after gawking at the astronomical rates. "I've never seen gas prices like that before."
"There's no way I'd ever pay that much," he added. "I don't care how badly I needed gas."
Other New York gas stations were high but not this high. The Brooklyn station seemed to be running about 75 cents to $1.00 higher than other stations in New York City area.
The AP reports on the soaring gas prices. Gas prices are already ahead of the national average of $2.62 that the Energy Department expected for a high this summer.
The Energy Department says it expects the price of regular to average $2.62 a gallon, 25 cents more than last summer, over the April-September driving period. But prices around the country already are above that.
"Look, it's $41 to fill it up," complained Lorenzo Rivera, 26, a restaurant manager, as he pumped mid-level gas Tuesday at $3.05 a gallon at a Chevron station near the Watergate complex in Northwest Washington. Across the street at an ExxonMobil station, regular grade was going for $3.09 - and there weren't many customers.
Ervin Goodall, 56, a professional driver pumping supreme grade into his large sedan, was paying $3.29 a gallon. "It's lot higher than last year, a bigger hit," said Goodall, who added that when it comes to personal driving he's scaling back — no more Saturday day trips.
Guy Caruso, head of the Energy Department's statistical agency, said prices at the pump, which averaged $2.68 a gallon last week nationwide, are likely to increase 10 to 15 cents a gallon in the coming weeks, peak in May and drop off in late summer. He said the national average can mask local price spikes.
Airplane tickets are expensive as well so people with summer travel plans may be forced to drive anyway despite the rising costs. Gas prices are running significantly higher than a year ago -- as much as 40 to 70 cents higher. The hurricane season starts in June and one major hurricane in the Gulf could mean even more pain at the pump.
A Mercury Newsarticle says that the average price of gas in California is already $2.7 (33 cents above last years price) and is quickly headed to $3 gallon.
Gas prices could be marching toward $3 a gallon by summer and drivers are already starting to feel it at the pump.
Worries that ethanol could be in short supply this spring helped push the average price of gas in California to $2.70 a gallon on Friday, 20 cents higher than a month ago and a 33-cent jump from a year ago.
Prices could go even higher as more regions and oil companies begin using ethanol instead of the fuel-cleaning additive MTBE, or methyl tertiary butyl, because of underground water contamination fears.
"The shift from MTBE to ethanol is causing problems up and down the entire supply chain," said Sean Comey, who tracks gasoline prices for the American Automobile Association. "Unfortunately, there are some troubling signs on the horizon."
The article also cites an AAA study that found drivers do cut back when gas approaches or passes the $3 per gallon mark. The survey said 25% of drivers have cut back at current prices and another 29% say they will drive less frequently if gas prices exceed $3 a gallon.
Gas prices are on the rise again nationwide as summer approaches. A New York Daily Newsarticle quotes one insider who believes gas will hit $4 a gallon in parts of the U.S.
Homeowners and motorists got bad news yesterday as futures prices of crude oil, gasoline and natural gas rose and the American Automobile Association said gasoline at the pumps on Long Island rose by three cents in the past week.
For gasoline prices, at least one expert thinks this is just the beginning of a runup that will peak around Memorial Day weekend and again around Labor Day. "I think there are parts of the country that could see spike highs approaching $4 a gallon," said Mark Routt of Energy Security Analysis Inc., a consulting company in Wakefield, Mass.
Among his reasons: In the short term are shutdowns of refineries for maintenance or repairs, including part of a facility in St. Croix, the Virgin Islands, that's a key supplier to this region. Longer term, it will be a switch by refiners, largely voluntary, from the polluting MTBE to ethanol, a corn product, as an octane booster in gasoline. The shift, mandated by law last year in New York, will increase demand for - and the price of - ethanol, he said. "The supply pool just didn't increase overnight but the demand did," he said.
Gas prices have been running 30 to 40 cents above average since last year so it isn't a suprise to seem them jumping as the summer driving season approaches. Still people aren't going to be happy if this summer has prices 30 cents above last year's highs.
USA Todayreports that gas prices have dipped below the $2 mark in a few places. That national average is still $2.238 according to the AAA's Fuel Guage Report.
"We are seeing a smattering of sub-$2 prices surfacing like premature crocuses across the country, and we may see a flirtation with $2 or less in a broad swath of the country this month," says Tom Kloza, analyst at the Oil Price Information Service. He warns it won't last, and prices will rebound this spring.
Last time the U.S. average was less than $2 was March 7, when the U.S. Energy Information Administration reported $1.999. Hurricane-related shortages pushed the average to a peak $3.069 Sept. 5. Lowest since: $2.147 on Dec. 5.
Some experts believe gas prices this summer will top last year's high prices.
The $2.238 is actually not cheap for this time of year. Last year at this time the national average price was 30 cents less at $1.901. It would be very helpful if the Gulf of Mexico is not threatened or hit by another major hurricane again in 2006.
Gas prices are expected to rise for the rest of December and possibly into January according to an MSNBC.com article.
The federal Energy Information Administration said strong gasoline demand during December may be the biggest factor behind the recent jump in gasoline prices, which climbed 8.9 cents over the past week to a national average of $2.33 a gallon on Monday, up 53 cents from a year ago.
“For now, it does not appear that retail gasoline prices will average below $2 per gallon anytime soon, but barring a bumpy transition to the new gasoline formulations taking place this year or a major supply disruption, nor do we expect to see $3 per gallon either,” the EIA said in a weekly review of the oil market.
There are fears that with another hurricane season starting in June and continuing heavy demand for oil worldwide that gas could indeed breach $3 despite what the EIA says. The AAA's Fuel Guage Report shows the national average gas price at $3.21 which is ten cents higher than it was a month ago.
Gas Prices Fall But Still 40 Cents Above Last Year
The good news is that gas prices are falling and according to the AAA's Fuel Gauge Report the national average gas price is just above the $2.30 a gallon mark. But that is still about 40 cents higher than the national average this time last year which was around $1.90. A USA Todayarticle reports on some gas prices in different regions.
n the EIA's weekly survey, the West Coast had the most expensive regional gasoline, with the price down 8.9 cents to $2.62 a gallon. Miami again topped the agency's survey of cities, with gasoline down 11.1 cents to $2.72 a gallon.
The Midwest had the cheapest gasoline at $2.23 a gallon, down 9.5 cents. Among major cities, Cleveland had the cheapest fuel, down 10.6 cents to $2.16 a gallon.
The EIA report also showed prices, rounded to the nearest penny, down 6.8 cents to $2.70 in Los Angeles, down 7.3 cents at $2.56 in Seattle, down 10.5 cents at $2.44 in Chicago, down 13.1 cents at $2.42 in New York City, down 13.1 cents to $2.37 in Houston, and down 11.4 cents at $2.33 in Boston.
Separately, the weekly price for diesel fuel fell 17.8 cents to $2.70 a gallon, the lowest level since late August but still up 54 cents from a year ago, the agency said.
Gas price listings on GasPriceWatch.com also indicate that gas prices have fallen.
The Associated Press reported oil companies made huge profits in the third quarter as a result of the high oil prices. Exxon Mobil Corp. had quarterly sales over $100 billion and Royal Dutch Shell PLC saw a profit of $9 billion just in the third quarter. The AP article says the enormous profits raise questions about why these high costs being pased on to consumers.
Those results led Democrats in Congress to demand a new windfall profits tax. "Big oil behemoths are making out like bandits, while the average American family is getting killed by high gas prices, and soon-to-be record heating oil prices," Sen. Chuck Schumer, D-N.Y., said in a statement.
But Energy Secretary Samuel Bodman said President Bush opposes such a move and is instead considering a wide range of proposals to help cushion consumers, including the creation of an emergency reserve of gasoline and other refined products.
Thursday's outsized earnings are a result of surging oil and natural gas prices that pushed pump prices to record territory after Hurricane Katrina. They come on the heels of similar eye-popping gains reported this week by BP PLC (BP), ConocoPhillips Inc. and Marathon Oil Corp. (MRO) Chevron Corp. (CVX) reports its earnings on Friday.
Gas prices have come down from the all-time high in September but the average national gas prices is still over $2.50 a gallon according to the AAA's Fuel Gauge Report.
According the AAA's Fuel Gauge Report gas prices have fallen about 30 cents since the peak of $3.057 on September 5th, 2005. Despite the drop in prices gas prices are still higher than they were in August (about $2.50) and almost a full $1.00 higher than they were in February ($1.96). A CNN article says five oil refineries closed by Hurricanes Katrina and Rita are still closed.
Five U.S. oil refineries remained completely shut in the aftermath of hurricanes Katrina and Rita Wednesday, accounting for 1.31 million barrels per day (bpd) of fuel production, or 7.7 percent of the nation's capacity, Reuters reported.
At least one of those plants, Motiva's 275,00 bpd refinery in Port Arthur, Texas, was gearing up for restart sometime this week. The others were expected to remain idle longer.
Hurricane Wilma is not forecast to disturb the oil rigs in the Gulf of Mexico.
The USA Today article says that the findings of a study about gas prices indicate that the breaking point in what people think is a reasonable price varies by region.
Americans angrily grit their teeth as they pump $3-per-gallon gas. They think $2 is about right. In Britain, $3 sounds fanciful — people there pay about $6.40 a gallon and think $5 would be fair.
AP-Ipsos polling in the United States and eight of its allies turned up wide disparities in people's thoughts on the cost of filling up.
Spaniards would like to see gasoline for just over $3 a gallon. People in France, Italy, Germany and South Korea put the fair market price $4 or a little more. Australians and Canadians would like to see it just under $3 a gallon.
The article also says that the U.S. consumes about 25% of the total global oil consumption. It seems that Americans might need to get used to higher gas prices but Americans were spoiled by years of cheap gas and many have purchased large SUVs so this is much easier said than done.
Energy Secretary Samuel Bodman has told USA Today journalists in an interview that the already high gas prices made worse by Hurricanes Katrina and Rita will last at least six more months. He even mentions possible shortages of gas as well as natural gas and heating oil.
"How long before we return to normal? It's hard to know, because we have not yet got an assessment" of damage from Rita, Bodman said in an interview with USA Today on Friday. He said it will be two to three weeks before the assessment is done.
"We're going to go through a very challenging time the next six months, is my guess," Bodman said. "Most of us have viewed energy availability as a kind of right of citizenship," he said, and might have to rethink that as refineries are restarted, pipelines repaired and natural gas processing resumed. "Both in terms of gasoline availability and (prices of) natural gas and heating oil, we're going to have some problems."
Gas prices jumped over the weekend and again today. The national average gas price is closing back in on the $3.00 range according to AAA's Fuel Guage Report. You know things are not great when the same administration that gave tax breaks for people buying huge SUVs is preparing to implement a conservation plan.
The government conservation plan will ask Americans to turn off lights, change thermostat settings, drive slower, insulate homes and take other steps.
Initially it looked like there might be good news about the future of
gas and oil prices. However, it turns out that several of the refineries
have been damaged or flooded and may be offline longer than hoped.
And there has been record damage from Hurricane Rita to the oil rigs in the Gulf of Mexico according to a Financial Timesnews story. Many of the large oil rigs are damaged or missing.
ODS-Petrodata, which provides market intelligence to the offshore oil and natural gas industry, said it expected a shortage of rigs in the US Gulf this year.
"Based on what we have right now, it appears that drilling contractors and rig owners took a big hit from Rita," said Tom Marsh of ODS-Petrodata. "The path Katrina took was through the mature areas of the US Gulf where there are mainly oil [production] platforms. Rita came to the west where there is a lot of [exploratory] rig activity."
Ken Sill of Credit Suisse First Boston said: "Early reports indicate numerous rigs are missing, destroyed or have suffered serious damage and several companies have yet to report. Rita may set an all-time record."
The US Coast Guard said nine semisubmersible rigs had broken free from their moorings and were adrift.
This news has sent oil and gas prices climbing again. Gas prices have risen
just a few cents in the past couple days but could climb more in the near future. Currently, the Fuel Guage Report has the national average price for gas at $2.81.
President Bush seemed to confirm the gas supply troubles when he
urged people to drive less. The International Herald Tribune
reported on Bush's request.
He added that if Americans could avoid going on "a trip that's not essential,"
that would be "helpful."
He also issued a directive for all federal agencies to cut their own energy
use and to encourage employees to use public transportation.
Yes, the same administration that once gave tax breaks to consumers buying huge SUVs is now encouraging Americans to drive less. All of the oil rigs in the Gulf have not yet been checked so it will be a while before the full extent of the damage caused by Rita is known.
A Forbes.com article sites experts that cite the unthinkable: $7 a gallon gas. Rita new track into the Port Arthur, Texas and Lake Charles, Louisiana area puts major oil refineries in harms way.
Extensive flooding in Port Arthur, Tex., or Lake Charles, La., would cause prices to spike, possibly as high as $6 or $7 a gallon, doubling the widespread assumptions of $3-a-gallon gas that are expected in the aftermath.
Either way, it's going to be disruptive. With refiners shutting down and assuming 4 million barrels per day of capacity is shut in for at least five days, the lost production would amount to 20 million barrels. Gasoline, currently the tightest product, with inventories 500,000 barrels below the five-year average, "runs the greatest risk of tightness and price increases," analysts say. (See: "Rita Recovery May Be More Protracted Than Katrina's.")
"Rita will have a significant impact on petroleum product markets even without significant damage similar to Hurricane Katrina," Merrill Lynch (nyse: MER - news - people ) analysts conclude.
Gasoline prices hit $5.87 a gallon in parts of Georgia, but regional spikes won't become a national trend if Rita packs less wallop than originally feared. The American Automobile Association's daily survey of prices on Friday pegged the national average for regular unleaded gasoline at $2.748 a gallon, $2.918 for midrange gas and $3.025 for premium. The average price for diesel is $2.826 a gallon.
The situation is so serious that Georgia has already closed schools for Monday and Tuesday to conserve energy. Forbes.com said analysts say several energy companies including Valero Energy, ConocoPhillips, Exxon Mobil and BP have up to
15% of their total oil refining capacity located directly in Rita's forecasted path. This graphic, which was originally created for Hurricane Katrina, shows the large amounts of refineries and oil rigs in Rita's path. Hopefully, any damage to the industry will be temporary and the U.S. will quickly regain any lost refinery capacity. More Hurricane Rita resources can be found on BloggersBlog.com's Hurricane Rita section.
A CNN new story quotes energy analyst Peter Beutel of Cameron Hanover who says gas prices could go as high as $5 gallon if Hurricane Rita hits the Texas coast as hard as expected.
Weather and energy experts say that as bad as Hurricane Katrina hit the nation's supply of gasoline, Hurricane Rita could be worse.
Katrina damage was focused on offshore oil platforms and ports. Now the greater risk is to oil-refinery capacity, especially if Rita slams into Houston, Galveston and Port Arthur, Texas.
"We could be looking at gasoline lines and $4 gas, maybe even $5 gas, if this thing does the worst it could do," said energy analyst Peter Beutel of Cameron Hanover. "This storm is in the wrong place. And it's absolutely at the wrong time," said Beutel.
A strike near the TX/LA border could take out the production capacity of 3 million barrels of oil per day according to another oil industry insider. This map shows the refineries that could wind up in Rita's path.
If Rita hits both the Houston-Galveston area, as well as the Port Arthur-Beaumont region near the Texas-Louisiana border, that could take out more than 3 million barrels of capacity a day, according to Bob Tippee, editor of the industry trade journal Oil & Gas Journal in Houston.
"Before Katrina, the system was already so tight that the worst-case scenario was for a disruption that took 250,000 barrels of capacity out of the picture. That would have been considered a major jolt," said Tippee.
The Oil and Gas Journal's website is lcoated here. Gas shortages are already being reported in Houston as millions try and evacuate the area before Katrina arrives. A collection of Hurricane Rita blogs and resources can be found here.
Forbes.com has an article that says fears about Hurricane Katrina's impact on U.S. oil refining capacity along the Texas coast is driving up oil prices.
Cliff Evans, oil analyst at the Independent Commodity Information Service, noted that Rita is heading towards the Texas coastline where about a quarter of US refining capacity is based.
'Basically its going to affect the region that was not affected by the last hurricane,' he said.
Evans said that with the storm currently barreling through the Gulf of Mexico, gas prices and not just crude oil should turn higher.
'The Gulf of Mexico produces a substantial amount of crude oil and natural gas. On Monday when we had big up day for natural gas futures, which hit a record high - they were higher on Monday than they were post Katrina,' he said.
Gas prices have fallen since the post-Katrina spike. However, the drop may be short-lived if Hurricane Rita damages oil refineries and oil rigs located in Texas. The Forbes article said Hurricane Katrina destroyed 46 oil platforms. Rita is alreay a category four storm and is expected to become a large storm like Katrina.
Another storm threat is upon the Gulf of Mexico.
The National Hurricane Center has Rita traversing
the Gulf of Mexico towards the Texas coast with a Northerly turn
to the NW at the end. While this is very early on
in the forecast a threat to the NW Gulf of Mexico
could cause more oil rigs to be abandoned for the
safety of oil rig workers. That alone will slow
down production. If a major hurricane actually
hits the NW Gulf of Mexico we would be looking at
a significant climb in gas prices. This graphic (from Katrina) offers a look at where all the
oil rigs are in the Gulf. Unfortunately, many
of them will be evacauted if Rita moves across the
Gulf of Mexico. Oil has already jumped in price over $3 this morning because of the threat that Rita poses to oil rigs in the gulf.
Marketwatch.com has an report on the status of U.S. refineries hit by Hurricane Katrina. 8 went offline after the hurricane. The good news is that 4 of them are already back online. The bad news is that the other four, which represent 5% of the total refinery capacity in the U.S., will not be ready for months.
Hurricane Katrina slammed into the heart of the Louisiana energy industry, shutting eight major refineries that together account for about 12% of total U.S. capacity. Four of those refineries have already restarted.
The remaining four, representing 5% of U.S. capacity, could be down for months, the Energy Department warns. Murphy Oil Corp. (MUR) has said it will be months before it can restart its 120,000 barrel a day refinery in Meraux, near Chalmette and also in St. Bernard Parish.
Dwight Bradshaw, senior environmental scientist with the Louisiana Department of Environmental Quality, said last week the Chalmette refinery and ConocoPhillips' (COP) 247,000 barrel a day Alliance refinery in Belle Chasse, La., will take months to restart, though Chalmette could be the first to return.
Meraux could take as long as six months, said Bradshaw, who has interviewed refinery personnel on site and conducted daily flyovers of the refineries as part of his job of assessing the environmental consequences of the storm's impact on energy facilities. Lingering flood waters, limited road access and sustained power outages will delay the plants' restarts, Bradshaw said.
Meanwhile, gas prices have dropped a few cents to a national average price of 2.92 according to the Fuel Gauge Report. That is down a fourteen cents since the post-Katrina peak of $3.06 but still about 50 cents above already record high pre-Katrina prices.
Donald Trump has some advice on why gas prices are rising. He says $3 a gallon is ridiculous and he wants the U.S. to get going on alternative energy.
People swallowed hard when gas hit $2 a gallon last year. Now, it has passed yet another horrific milestone. In some parts of the country, people are paying as much as $3 a gallon at the pump. That's just ridiculous. Plus, there's no sign that things are going to get any better.
I wish that the United States would just get on the ball with alternative energy. As much as I'm impressed with the space program, maybe those funding dollars should be redirected into research that would develop other ways of fueling our nation.
I'm also very tired of hearing about how our government is working with Saudi Arabia to try to stop the rising price of oil. I can see those heads of oil-producing countries just laughing as they continue to jack up the cost per gallon. If we would just threaten to stop protecting all those countries, I think we'd see an immediate drop in oil prices.
The space program does not sound like the place to be cutting at all but there are definitely some real pork barrel projects out there that could go. (Via B2Blog)
According to the AAA's Daily Fuel Guage Report gas prices have passed the $3 mark and currently stand at $3.04. That number is actually down a penny from yesterday. But there is a lot of difference in the price from city to city and even from station to station. For example, AtlantaGasPrices.com shows gas prices in Atlanta ranging from $2.62 to $3.42. New York, where gas prices have jumped passed the $3.40 mark, has prices ranging from $3.09 to $3.89 according to NewYorkGasPrices.com. A USA Todayarticle says that because some refineries are offline experts are concerned that gas prices will rise in the coming months.
Despite the steps by industrialized nations to avert a fuel shortage, analysts warn that long lines at U.S. gasoline pumps and record prices could augur higher oil costs in the months ahead.
"With nearly three months to go until the end of the Atlantic hurricane season, which peaks between mid-September and mid-October, more storms — both real and metaphorical — could be on the horizon," Energy Intelligence says on its Web site.
Energy analyst Orrin Middleton of Barclays Capital in London says the price relief was likely temporary because of concerns about refinery capacities.
"The huge rally we got last week shows that it's a product more than a crude problem," he says. "I don't think further OPEC crude is going to alleviate the refinery problem."
Gas Prices Skyrocket. Rationing and Shortages Reported
Gas prices jumped 17 cents to $2.87 on the Fuel Guage Report. However,
that number may low as gas prices are rising by the hour in some locations.
GasPriceWatch.com shows the national average at $3.08 and GasBuddy.com shows it at $3.01.
And locally prices have spiked with some very high reports of $5 or $6 a
gallon for regular unleaded in Atlanta. Shortages have also been
reported in areas. Many people complaining about price gouging. The Washington Postreports that thousands of people have called in to the Feds complaining about gas price gouging.
The Energy Department reported more than 5,000 calls to its price gouging hotline Thursday from around the country, although officials emphasized there was no way to immediately determine how many of the allegations were valid.
Many cities are reporting big spikes in gas prices. One newspaper
in Colorado, the Colorado Springs Gazette, reported that some consumers said Tuesday that the prices were going up as they watched.
"I went in McDonald's to get lunch, and when I came out, gas at the
station across the street was 6 cents higher," said Black Forest resident
Evelyn Shinn, who was filling her tank at a BP station on North Academy
Boulevard during her lunch break. "I'm not happy at all," she said.
Katrina, which has unleashed a catastrophic storm on New Orleans, Gulfport, Mobile and other cities located on the Northern Gulf of Mexico, has greatly impacted the oil industry. Rigzone.com says 25% of our nation's oil is produced in the impacted area.
The Gulf of Mexico accounts for about 25% of the nation's energy production, while refineries hit by the storm account for nearly 10% of the nation's refining capacity.
At least five big Gulf Coast refineries also remained shut, as was the Louisiana Offshore Oil Port, or LOOP -- the nation's only deepwater oil terminal.
The LOOP typically receives tankers delivering about 1 million barrels of crude oil a day, or 10% of the nation's imported crude.
Problems getting into the area have made it difficult for the oil industry to do a damage assessment. But at a minimum: refineries may be damaged; workers may be homeless, hurt or missing; damage to roads; and lack of power will make getting the area back up to its full capacity very difficult. CNN has an article citing experts that warn consumers their worst fears have been realized: $4 gas.
"There's no question gas will hit $4 a gallon," Ben Brockwell, director of pricing at the Oil Price Information Service, said. "The question is how high will it go and how long will it last?"
OPIS tracks wholesale and retail oil prices and provides pricing information for AAA's daily reports on fuel prices.
Brockwell said with gasoline prices now exceeding $3 a gallon before even reaching the wholesale level, it "doesn't take a genius" to expect retail prices to hit $4 a gallon soon.
"Consumers haven't seen the worst of it yet," Brockwell said.
Bloomberg reports that U.S. Energy Secretary Samuel Bodman says the White House has already made the decision to tap into the emergency oil reserves.
Bodman, speaking on CNBC television, today said the government can meet a request for oil by tomorrow. He said domestic gasoline supplies are a ``concern.''
``It certainly has got to have a dampening effect'' on prices, said Tony Machacek, a broker at Bache Financial Ltd. in London. ``It will help, but whether it's enough to keep the market down in the long term remains to be seen.''
It will clearly take some time before the full impact of Katrina on the oil and gas industry is known. In the short term it looks like more pain for drivers at the pump and more interest in hybrid automobiles. A collection of links about Hurricane Katrina can be found here.
Katrina's Devastating Blow Will Lead to Higher Gas Prices
Hurricane Katrina's devastating impact on the Northern Gulf Coast will lead to higher gas prices. Oil has already soared to new record highs. Florida Todayreports that gas prices will rise at least 15 cents for Florida residents.
"We expect prices to jump at least 15 cents a gallon in Florida, depending on the damage as a result of the storm" to Gulf of Mexico oil refineries and shipping channels, said Jake Bournazian, an economist for the Energy Information Administration. "We don't know the full magnitude until damage is assessed."
A 15-cent-a-gallon increase would boost the average Florida price of regular unleaded to $2.78 and the price of premium to $3.05. Experts say higher retail gas prices could show up within days, as the price of a barrel of crude oil closed Monday up $1.07 at $67.20, after hitting $70.80 a barrel earlier in the day.
Shortages may even occur in places in Florida according to the article because 90% of Florida's gas comes from oil delivered and produced in the area impacted by Katrina. Newsdayreports that Senator Charles Schumer has warned New York residents that gas could reach $3 a gallon. With the rise in oil prices some gas price increases will occur nationwide. The final increase in price will depend on how much damage Katrina caused to oil rigs and how much delay there will be getting important infrastructure and refineries in the region back online.