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Gasoline prices in the United States are expected to increase slightly over the next few two weeks like Ida disrupts the fuel supply, experts say.
According to energy research firm S&P Global Platts, around 95% of the Gulf Coast’s oil and gas production was halted as Ida entered the region on Sunday. The storm made landfall near Port Fourchon, Louisiana around 1 p.m., with sustained winds of up to 150 miles per hour. By early Monday, Ida had become a Category 1 storm, but continued to wreak havoc in the region.
Colonial Pipeline, the largest pipeline operator in the United States, has temporarily halted fuel deliveries from Houston to Greensboro, North Carolina, as a “precautionary measure” when Ida lands.
Experts said shutting down energy facilities would lead to temporary increases in gas prices. Patrick De Haan, head of petroleum analysis at research firm GasBuddy, said in a Tweeter that prices at the pump will likely increase by at least 5 cents per gallon nationally and could rise. But he does not expect a drastic increase in gas prices.
Other experts believe that fuel prices could see a larger increase. Brian Bethune, an economist at Boston College, predicted that gas could rise by at least 20 cents per gallon depending on the length of production shutdowns.
The average price of a gallon of regular gas has hovered around $ 3.08 in recent weeks, down from around $ 2.16 in January, according to the U.S. Energy Information Administration.
As of noon Monday, US crude oil prices were up 0.5% to $ 69.07.
Mark Zandi, chief economist at Moody’s Analytics, said the disruptions caused by Ida will likely lead him to cut his forecast for annual US economic growth in the current quarter by a few tenths of a percentage point. But that could reverse over the rest of the year as the region rebuilds itself.
After Colonial Pipeline ransomware hack in May, some states saw prices rise sharply as gas stations ran out of gas and motorists have accumulated gasoline. With Ida, prices are only expected to rise if people panic again and rush to gas stations, according to De Haan.
“There will be NO gas shortages as the pipeline is temporarily down, just one that humans create by submerging the system,” he tweeted.
Colonial expects to resume full service once it assesses its infrastructure after the storm, the company said in a statement on Sunday.
The Associated Press contributed to this report.
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