By Brian L Milne, Refined Fuels Editor, DTN
Hurricane Gustav ripped through the Gulf of Mexico and came ashore Labor Day, forcing oil companies to evacuate oil rigs operating in the offshore waters in advance of the storm, while causing power outages in states along the Gulf that, in turn, kept oil refineries offline.
However, the storm was not as bad as it could have been, with oil companies not reporting major damage to their vast supply and distribution network–just interruptions.
Also, the federal government stepped in, issuing fuel waivers that ease gasoline specifications and allow for substitute fuel types to be brought into areas impacted by the storm that are required to use lower evaporating grade fuel during the summer months.
States with counties granted a temporary reprieve from the standards include Louisiana, Texas, Alabama, Georgia, North Carolina and Florida.
The net result was gasoline prices actually moved lower in several wholesale markets during the first week of September. Still, some regions impacted by the hurricane where encountering tighter supplies due to the storm and, as a result, higher prices.
Counties in southern states along the Gulf Coast should expect a bump in retail prices this week as regional supply levels are replenished. Parts of the Midwest, especially around Oklahoma, should expect pump prices to continue their decline, but residents near Chicago will likely pay more because of a local outage that limited supply rebuilding.
About the Author Brian L. Milne is the Refined Fuels Editor for DTN–a leading business-to-business provider of real-time commodity information services. Milne has been focused on the energy industry for nearly 14 years as an analyst, journalist and editor. He can be reached at [email protected].