Gulf storms crimp gas supply
Jeremy Hobson: There is flooding across the northeast this morning, thanks to the remnants of Tropical Storm Lee. In the Gulf of Mexico, Lee’s effects are dissipating, and oil and gas production is slowly coming back online.
But as Sarah Gardner reports, the storm is pushing gas prices up nationwide.
Sarah Gardner: Oil and gas operators are now re-boarding rigs and getting back to business. But as of yesterday afternoon, almost 37 percent of the region’s oil production was still turned off.
Industry consultant Andy Lipow.
Andy Lipow: The effects of Tropical Storm Lee have made its way into the marketplace and we’re seeing rises in crude oil and gasoline prices.
Lipow predicts you’ll soon feel that at the gas pump. But analyst Stephen Schork says that bad weather bounce could quickly be offset by a change of seasons.
Stephen Schork: The good news is that because of environmental regulations, we actually begin to switch over to a winter grade gasoline, which is cheaper to manufacture. So indeed, consumers are looking at potentially lower prices in the weeks ahead.
Key word: potentially. Hurricane season’s not over yet. Long-term, Schork says, get used to the prices. The “new normal” for American drivers: well above $3 a gallon.
I’m Sarah Gardner for Marketplace.
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