Gas Prices Climb Due to Refinery Shutdowns, But Experts Still Expect Price Drops Soon
WASHINGTON – Refinery issues in the U.S. have driven gasoline prices upward despite relatively low demand, according to a new report from AAA. A number of oil platforms stopped production as Hurricane Isaac moved in earlier this week a precaution (taking roughly 1 million barrels per day of refining capacity offline for the shutdown period).
That said, the National Weather Service reported the downgrad of the hurricane to a tropical storm earlier this week. By the end of the week news reports also reported that oil platforms were largely unscathed.
Another shutdown at Chevron’s Richmond, Calif. refinery, caused by a fire, sent prices upward on the west coast recently.
Overall, the national price for a gallon of regular, self-serve gasoline is $3.75. This price is 3 cents higher than one week ago, 26 cents higher than a month ago, and 15 cents more expensive than on Tuesday, August 28 in 2011. Although prices saw a steep drop earlier this year, for the last 49 out of 55 days, gas prices have moved upward. The current price is 42 cents higher than the summer low on July 2 of $3.33 per gallon. The five states with the highest gas prices include Hawaii, at $4.28 per gallon; California, at $4.14; Washington, at $4.02; Oregon at $4.01; and Connecticut, at $4.00.
AAA noted that although gas prices typically start falling after Labor Day and continue to drop through the end of the year, in 2008 Hurricane Ike temporarily drove prices up in mid-September. Still, AAA stated that demand isn’t high, with bearish economic news putting downward pressure on prices.
As for oil prices, AAA noted the price of West Texas Intermediate crude oil stayed above $90 per barrel for most of August after a low of $77.69 on June 28, but that the price declined earlier this week to $95.47.