Higher Gas Prices Expected as Hurricane Ida Affects Oil Refineries

Higher Gas Prices Expected as Hurricane Ida Affects Oil Refineries

(ReliableNews.org) – Hundreds of thousands of Louisiana residents are suffering the aftermath of Hurricane Ida with no clear idea of when conditions might improve. Officials say it could be weeks before they can restore power and potable water for much of the southern portion of the state. Ida also caused serious damage to oil refineries scattered across Louisiana’s coastline and offshore drilling platforms.

The US Department of Energy released its latest update on the impact of Hurricane Ida on Tuesday, August 31. At that time, a total of nine refineries had shut down all operations, accounting for roughly 13 percent of the total US refining capacity. Additionally, 95 percent of all oil production and 94 percent of natural gas production in federally-controlled areas of the Gulf of Mexico remained in “shut-in” status, meaning they were no longer operating.

However, the Energy Department officials didn’t expect the refinery and offshore platform shut-ins to create immediate gasoline shortages. As of August 20, the Gulf Coast gas supplies were 3 percent over the five-year seasonal average.

Nevertheless, some experts like GasBuddy petroleum analyst Patrick DeHaan predicted gas prices could experience a temporary increase of as much as 15 cents. Others like the American Automotive Association said it was too early to predict Hurricane Ida’s impact on prices. However, it did warn members that prices would likely fluctuate some leading into the weekend.

Meanwhile, stocks remain at near-record highs on Wall Street, and refinery and offshore platform closures aren’t expected to drag down the nation’s economy as long as the end is in sight.

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