Katrina Expected To Cause Spike In Gas Prices
Posted August 30, 2005 5:38 a.m. EDT
RALEIGH, N.C. — Some critics say now might be a good time to fill up your gas tank -- if you can.
Analysts expect gas prices could jump up 15 to 25 cents this week. But as motorists flock to the pumps in an effort to save as much money as they can, some gas stations in North Carolina are actually running out of regular unleaded gas.
Drivers who do find gas may find prices creeping close to $3 a gallon. WRAL found one station selling gas for $3.17 a gallon.
While that does not seem to be the norm, it is an indication that it is clearly not out of the realm of possibility. One Apex gas station already had regular unleaded gas for $2.97.
"When I saw $2.97 for regular unleaded, I freaked out a little," said driver Mike Curtis. "It's gotta be cheaper somewhere else because I saw it in the 60s yesterday."
"They're ridiculous, but what can I say, we have to get gas," driver Kathy Richey said. "I'll drive two miles to save 10 cents a gallon if it's in the vicinity."
Analysts say Hurricane Katrina was the perfect storm to drive up gas prices. It hit the Gulf of Mexico, where a quarter of U.S. oil is produced. Around 700 rigs were evacuated, halting production in the short term, but there are questions about the long-term effect.
"It could be several weeks before we know the damage," said Energy Futures Trader Brian Archer.
Archer said the supply squeeze is already driving up prices. Oil traded briefly above $70 a barrel for the first time ever.
Last year, the price for a gallon of gas was about $1.80. This year, gas during the Fourth of July weekend was around $2.15.