Fuel costs: Keeping track of Hurricane Ian

 

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It is a frequent phenomenon: When a hurricane hits the Gulf Coast, fuel costs often rise. Why? That is easy, half the nation’s petroleum and pure fuel refinery capability is there. However Hurricane Ian would possibly thread the needle: At the moment close to Cuba and the Cayman Islands, it is projected to make landfall on the Florida West Coast or Panhandle on Thursday. There are only a couple of refineries close to Tampa — and so regardless that individuals are certainly gassing as much as get the heck out of there, fuel costs to date are paradoxically falling.

AAA stories that Floridians are paying 4 cents a gallon lower than final week, with the common for normal unleaded at $3.38.

Nationwide, the common value is $3.72, which is up 5 cents in the identical interval.

The elements controlling gasoline costs are many, after all, and so an impending hurricane shouldn’t be, at the least on this case, pushing costs up as a result of the petroleum market is apprehensive about one thing else that is nearly as scary as a hurricane: the chance of recession. 

“There’s truly downward strain on pump costs, regardless of the forecast {that a} hurricane would strategy Florida this week,” mentioned AAA spokesman Mark Jenkins. “Gasoline and oil futures costs plunged 7% final week, to 8-month lows on considerations that aggressive rate of interest hikes by the U.S. Federal Reserve may set off an financial recession.

“Since Tropical Storm Ian shouldn’t be projected to affect the refineries in Louisiana, Mississippi and Texas, it’s unlikely that the storm itself or the ensuing demand, would trigger pump costs to spike,” Jenkins mentioned. 

AAA does say that Ian may, after all, disrupt gasoline provide chains, which may result in Florida stations working out of gasoline. Gasoline arrives by tanker from the opposite Gulf states, and is offloaded in Florida ports to vans, which take it to filling stations. However even when momentary shortage units in, AAA factors out that price-gouging legal guidelines would prohibit station homeowners from making the most of restricted provide, requiring them to take care of a value doesn’t exceed what they’ve charged within the earlier 30 days. Here is AAA’s full tackle the Florida state of affairs.

As for the remainder of us, that $3.72 nationwide common being reported right this moment by AAA — although a part of a protracted regular decline from the excessive of $5.01 in mid-June — is a rise of 5 cents a gallon up to now week. There have been some refinery points behind that, however the uptick won’t final lengthy relying on what the hurricane does. AAA factors out that on Friday, crude costs fell beneath $80 a barrel for the primary time since January, because the market is nervous in regards to the potential for a recession. Plus, U.S. demand for oil has slipped now that the summer season trip season is over and the children are again at school. 

“Slack demand and decrease oil costs ought to take some strain off rising fuel costs,” mentioned Andrew Gross, one other AAA spokesman. “However Hurricane Ian may trigger issues, relying on the storm’s monitor, by disrupting oil manufacturing within the Gulf of Mexico and impacting giant coastal refineries.” 

So there you’ve one AAA spokesman saying the hurricane is unlikely to impact fuel costs, and one other spokesman saying it may, if the storm’s path had been to take a tough left flip. 

Both approach, whereas we’re now not paying $5 for fuel, we’re, as at all times, on the mercy of which approach the wind blows, each meteorologically and economically.