Lower Gasoline Price Average may Reverse with Hurricane Sandy

The nationwide weekly average for the price of regular gas is $3.57 per gallon, a drop of 2 cents, according to the latest report of the Energy Information Administration. However, Hurricane Sandy can significantly impact the refineries along the East Coast and ultimately push current gasoline prices higher.

Meanwhile, per barrel oil prices had declined prior to the closing of financial markets because of Hurricane Sandy. Analysts expect gasoline demand to fall as motorists limit their driving.

Several petroleum analysts have reported a major reduction in reports from drivers in Hurricane Sandy’s affected areas. For example, Washington D.C. is sending 55 percent fewer gas price reports than it did last week, indicating the lack of a clear picture as to what is occurring in those markets.

Gasoline prices today may not be significantly affected by Hurricane Sandy, but changes in the long term will be dependent on the extent of damage that the storm may bring to the region.

If the area’s refineries quickly restart their operations after the storm, only minimal increases in the current gasoline prices are expected.

After Hurricane Irene hit in August of last year, the national gasoline price average moved up by almost 8 cents per gallon. And yet fewer increases are expected from Sandy as of the moment.

In the Northeast, the gasoline prices today may increase by 5 to 15 cents per gallon. However, the largest effect is still yet to be seen after Sandy leaves, according to analysts.

By: Chris Termeer