Tom Kloza is the chief oil analyst for the Gaithersburg-based Oil Price Information Service, a source for petroleum pricing and news information. On Tuesday, he held a media conference call on gasoline prices in the wake of Hurricanes Gustav and Ike. Baltimore-area gas prices have jumped back to $3.70 a gallon after dipping below $3.50 a gallon last week.
How did the recent hurricanes affect oil supply?
If you think of the U.S. Gulf Coast as lungs, Hurricane Gustav partially collapsed the right lung. Then, just as that lung was being brought back to normal, Hurricane Ike collapsed the left lung. The prognosis for the patient — in this case, U.S. motorists and other end users — is good, but we’ll be coughing and wheezing with supply outages, dislocations and even a few gasoline lines for the next few weeks.
What could that mean in terms of pump prices?
Motorists might see pump prices in a given market vary by 50 to 75 cents per gallon or more in the next few days. They might inaccurately conclude that the retailer at $4.50 [per gallon] is “gouging” or making considerably more than the retailer at $3.75 [per gallon]. Wholesale prices are all over the place at the moment.
Oil is down, though, so why the gas price increase?
If you’ve been around business news Tuesday, you’ve seen crude oil prices close to $90 a barrel. That’s compared to about $147 a barrel in early July. Those numbers are really an indication of the future and not the present. Right now there’s a lot of people getting out of anything that deals with risk.
Where do we go from here?
We’ll see many retail gasoline prices around $4 a gallon through the remainder of September, and perhaps into mid-October. If not for Gustav and Ike, we could expect prices to average closer to $3 to $3.25 per gallon.
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Complaints of gas gouging
As attorneys general across the country open investigations into gas price gouging in the wake of Hurricane Ike, Maryland officials say they have received relatively few complaints.
As of Tuesday, 20 Marylanders have complained of gas price gouging, said Shanetta Paskel, a spokeswoman for Attorney General Doug Gansler. His office will review each complaint individually and investigate accordingly, she said.
States including Illinois and North Carolina — which has been issuing subpoenas to suspected gas stations — have opened broad investigations.
