Gas prices likely headed up due to hurricane, holiday weekend.
Rise in virus cases may reduce demand for fuel
Gas prices in Wisconsin and across the U.S. are likely headed higher.
The price is likely to follow its typical post-hurricane pattern – rising as potential damage to Gulf Coast refineries and other petroleum infrastructure is assessed – and then falling once the situation settles down, a veteran oil industry analyst said.
Bottom line, gasoline prices will likely be headed higher in Wisconsin and across the U.S. in the coming days as the combination of Hurricane Ida and the Labor Day holiday weekend add uncertainty and increased demand into the gasoline market, said Jim Ritterbusch, president of Ritterbusch and Associates, an oil trading and advisory firm in Galena, Illinois.
“There are a lot of moving parts here. The main impact of the storm is going to fall on gasoline,” Ritterbusch said. “It’s probably going to boost prices from here.”
The situation is complicated by rising numbers of COVID-19 cases as the delta variant rampages across the U.S. and prompts some people to again hunker down at home, reducing the demand for gasoline.
“I expect the national average to rise in the neighborhood of 5-15 cents per gallon in the next couple of weeks,” said Patrick De Haan, head of petroleum analysis for GasBuddy. That’s significantly less than the impact from Hurricanes Katrina and Harvey, De Haan said.
“But with damage assessments still to come, it’s possible we see slight deviation from that.”
Other forecasts are for an increase of 10 cents to 20 cents per gallon in coming weeks.
“Drivers will almost assuredly see gas prices rise this week, because of Hurricane Ida’s effects on the Gulf Coast,” said Mark Jenkins, spokesman, AAA – The Auto Club Group. “Based on overnight movement in the futures market, a 10-20 cent jump at the pump is not out of the question.”
For now, all eyes are on the northern Gulf of Mexico region.
“The big uncertainty is how the refiners down on the Gulf Coast region came out of this,” Ritterbusch said. “At the end of the day, it looks like we are going to see a further lift in prices, especially going into a holiday weekend.”
Hurricane Ida, which tied for the fifth-strongest hurricane to hit the U.S. mainland, left so many customers without electricity that any prolonged power outage could have repercussions, at least temporarily, for the oil, natural gas and chemical companies that have major operations along the gulf.
On a national scale, Mark Zandi, chief economist at Moody’s Analytics, said the disruptions caused by Ida will likely lead him to downgrade his forecast for annual U.S. economic growth in the current July-September quarter by a few tenths of a percentage point.
That economic loss could be temporary, Zandi said, as a result of the rebuilding from the hurricane’s damage that will likely follow during the final quarter of the year.
The Associated Press contributed to this report.