After a stretch of time where consumers saw high gas prices, this week consumers saw some relief at the pump, however with Hurricane Sandy on the way, this could lead to increases in gas prices.
Digital Journal reported earlier today on the "Perfect Storm" that is brewing as Sandy moves north and collides with two storms coming from the west.
If the storm plays out in the scenarios being reported in the media, the potential for damages and extended power outages are high.
Currently, consumers are enjoying lower prices, however, that could all change as the weekend and Sandy arrive.
If the East Coast is hit hard by the storm, this could potentially shut down several refineries located in the region, disrupting the supply and increasing gas prices. According to CBS News, 6.5 percent of the gasoline U.S. consumers use is produced on the East Coast. Seeking Alpha suggests 4-7 percent of the U.S. oil refining capacity could be impacted.
Tulsa World reported (via Associated Press), the price of oil rose slightly on Thursday and Friday.
“Oil would have closed lower if not for the Frankenstorm,” said Phil Flynn, senior market analyst at Price Futures Group in Chicago, reported Business Week. “It’s obviously having a bigger effect on heating oil and gasoline because supplies are tight. If the storm shuts refineries and we’re then hit by a cold snap, we could see heating oil prices surge.”
Overall, however, some are reporting that while consumers may see an uptick in the immediate future because of the storm, gas prices are likely to drop again once the storm passes through.