Hurricane Rita May Lead To Even Higher Gas Prices, Experts Say
Posted September 20, 2005 9:14 a.m. EDT
RALEIGH, N.C. — Around Labor Day, gas prices sky rocketed to more than $3 a gallon. Since then, gas prices have dropped. According to AAA, on Tuesday, the average price for regular gasoline was $2.78 a gallon.
One owner of a local gas station in Raleigh said the next supply of gas could cost 10 to 30 cents more per gallon, and this cost would be passed on to customers.
Energy experts said the reason was speculation about the path of Hurricane Rita.
"I think, in general, most people go to the pump and they see what the price is. They don't really understand how much the weather really effects our energy consumption and our energy supply," energy trader Brian Archer said.
First came Katrina's crushing blow, Archer said.
Now, Hurricane Rita's projected path toward Texas -- the heart of the country's oil production -- has energy analysts on edge.
"How could the market be so volatile days before a hurricane hits?" Bill Weatherspoon, of the N.C. Petroleum Council, asked. Because, he said, "All markets anticipate the future."
"The market clearly is a volatile place right now, and it reflects a lot of fear about the weather," he added.
As a Raleigh energy trader, Archer not only studies the market, he studies the weather, he said.
When early forecasts had Rita hitting the Texas and Louisiana border, crude oil prices made record one-day gains.
"Anything relatively close to that is going to be a huge threat," Archer said.
But, when the predictions veered further south and west, prices dropped again.
"This is the way the market works, but this is an unusual year," Archer said.
So unusual Archer makes predictions about gas prices that no driver wants to hear.
"I think anywhere from $4.50 to $5 at the pump sometime down the road," he said.
As for when that might happen, Archer hedges. If Rita hammers oil rigs and refineries, drivers may see these gas prices within a couple of weeks.
Or, it could be years down the road, Archer said.
For now, he said, North Carolina's gas supply is steady, but drivers should expect prices to rise again.