Sandy Gas Prices to Hit $5 a Gallon? Experts Divided
'I Suspect Prices Will Resume Their Downward Trend,' Says Tom Kloza, Oil Expert
Sandy's gas prices effect could make travel and transportation more difficult, according to experts, who claim that the storm's short-term consequences could make gas prices skyrocket. However, many other factors point to an overall decrease in prices at the pump.
Sandy gas prices were $3.543, which is down about half a penny from Sunday and down 13 cents from a week ago, according to the AAA daily Fuel Gauge Report. Although the average has been steadily decreasing since early October, some experts say the super storm's $20 billion in damage could have adverse residual effects for gas.
"I wouldn't be surprised over the next day or two to see the average price in some Northeastern states move a little bit higher," Avery Ash, an AAA spokesman, told USA Today. Other experts caution of a market panic over prices, which occurred earlier this month on the West Coast because of a lack of supply.
Get Our Latest News for FREE
The short-term forecast is coupled with reports of oil refineries that have shut down; Phillips 66, Hess, and PBF energy all shut down prior to the superstorm in anticipation, and they represent 58 percent of East Coast refineries. The lack of gas available- the Petroleum Administration Defense District only had a low 48 million barrels in reserve pre-storm- could lead to a spike in prices in the days ahead.
However, many others believe that the lack of gas available due to transportation issues could offset the short-term higher prices, sending gas prices spiraling back downward.
"We have been on a steady road toward cheaper gas prices nationwide. The storm could mean a small wobble to the upside for a few days, but I suspect prices will resume their downward trend," Tom Kloza, chief analyst at Oil Price Information Systems, told USA Today. Although some may "leap to conclusions and say they're running out of gas … the gas just hasn't been moved from Point A to Point B," he added.
In addition, many roads are closed, leading many drivers to stay home if possible. The lower demand could stave off the gas price hike from Sandy.
"It will take some time before we can get demand anywhere close to normal," Phil Flynn, an independent energy analyst, told Salon.com. "Many people are staying home if possible."
Superstorm Sandy struck the East coast this week, cutting power to 7 million homes, shutting down 70 percent of East Coast oil refineries, and causing $20 billion in damage, with up to $30 billion more lost in business revenue.
