Gasoline prices across the U.S. are likely to rise in the coming two weeks as Ida interrupts fuel supply, according to experts.
According to energy research company S&P Global Platts, approximately 95% of oil and gas production on the Gulf Coast stopped when Ida entered the region on Sunday. The storm made landfall near Port Fourchon, Louisiana, around 1 p.m., with sustained maximum winds of up to 150 miles per hour. By early Monday, Ida had weakened to become a Category 1 storm, but it continued to wreak havoc in the area.
Colonial Pipeline, the largest pipeline operator in the United States, temporarily halted fuel deliveries from Houston to Greensboro, North Carolina, as a “precautionary measure” during the Ida landing.
Experts said the closure of energy facilities would cause temporary increases in gas prices. Patrick De Haan, head of oil analysis at research firm GasBuddy, said in a tweet pump prices are likely to rise by at least 5 cents per gallon nationally and may increase. But he does not expect a drastic increase in gas costs.
Other experts believe fuel prices could rise further. Brian Bethune, an economist at Boston College, predicted that gas could jump at least 20 cents a gallon depending on the length of production shutdowns.
The average price of a gallon of normal gas has hovered around $ 3.08 in recent weeks, from $ 2.16 in January, according to the U.S. Energy Information Administration.
At noon on Monday, U.S. crude oil prices rose 0.5% to $ 69.07.
Mark Zandi, chief economist at Moody’s Analytics, said the disruptions caused by Ida are likely to lead him to cut his annual U.S. economic growth forecasts for the current quarter by a few tenths of a percentage point. But that could be reversed the rest of the year as the region is rebuilt.
After the Colonial Pipeline ransomware hack in May, some states saw prices rise sharply as gas stations ran out of gas. and motorists hoarded gas. With Ida, prices are likely to rise only if people panic again and gas stations rush, according to De Haan.
“There will be no gas shortage because the pipeline is temporarily inactive, just one that humans create by overwhelming the system,” he tweeted.
Colonial hopes to resume full service once it evaluates its infrastructure after the storm, the company said in a statement Sunday.
The Associated Press contributed to this report.