Why hurricane season could put an end to falling gas prices
Hurricane season drives up the demand for fuel
Gas prices may reach new records during 2022 hurricane season
Head of Petroleum Analysis for GasBuddy Patrick De Haan says any major storm in the Gulf of Mexico could be bad news ‘especially now with a decline in refining capacity that we’ve seen over the last few years.’
Relief at the gas pump could be short-lived if hurricane outlooks are accurate, and at least one of the monster storms impacts a major oil production zone.
Energy analysts at GasBuddy are putting out the warning ahead of the heart of the hurricane season which usually starts in August.
AAA reports the national average for gas is around $4.78 per gallon, but if a hurricane were to impact the critical Gulf states, the price could once again be in record territory.
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National gas prices as of Wednesday, July 6, 2022.
Patrick De Haan with GasBuddy says that hurricane season drives up the demand for fuel.
"We generally see the highest demand for gasoline in [. . .] late July, that can segue into early August, kind of coinciding with just about a week or two away from the peak of hurricane season really starts," De Hann said.
September is the most active month of the Atlantic hurricane season, especially in the Gulf of Mexico, as water temperatures reach the warmest levels of the year.
De Haan says hurricanes or tropical storms in the Gulf can be bad news.
"We tend to see major hurricanes have a profound impact on gasoline prices, specifically large storms over Category 3 that targeted an area between New Orleans and Houston," he said. "That's where we see dozens of refineries, of course, hundreds of offshore oil platforms in that vicinity."
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Gas prices could reach 'apocalyptic' levels during hurricane season
Tom Kloza, Global Head of Energy Analysis at OPIS, talks about how gas prices could reach ‘apocalyptic’ levels during hurricane season.
The country has a history of seeing major impacts on oil production zones from tropical cyclones.
Hurricanes Katrina and Rita in 2005 caused the shutdown of significant oil production operations, ultimately driving up costs at the pump.
According to AAA, Hurricane Katrina shuttered a quarter of the country's total domestic crude production and forced the federal government to release 20 million barrels of crude oil from the national reserve to stabilize gas prices across the country when they spiked due to reduced supply.
Several oil and gas platforms were impacted during Hurricanes Rita and Katrina
(U.S. Government Accountability Office 2006)
Oil and gasoline prices jumped immediately after Katrina due to the widespread damage to energy infrastructure. Oil prices rose to nearly $70 per barrel, and gas prices increased by as much as 50 cents per gallon.
With the decline in refining capacity that we've seen over the last few years, De Haan says that we need every barrel of capacity that we can get.
"We should talk about refineries and preventative shutdowns and help refineries resume production after a storm passes. That helps them restore it a bit quicker," he said. "Shutting down ahead of the storm may help resume production faster on the flipside. And so that certainly is a big impact, potentially a big impact, especially in the area where oil prices have been very high. And the same holds true for gasoline prices."
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And as we continue to brace ourselves for the potential impact of increased gas prices within the next few months, De Haan recommends several things to save money at the pump.
"Driving more fuel efficiently, trying to slow down just a little bit, even a five or ten miles an hour drop in your speeds on the interstate can boost your efficiency by 5 to 10%. And of course, that could translate into savings of over $0.50 a gallon," he said.
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