Gas prices will leap by 10 cents a gallon because of Hurricane Harvey
With one out of every five barrels of oil produced in the U.S. threatened by Hurricane Harvey, it's a sure bet gas prices here will become collateral damage, according to experts.
Oil "prices are trading at a level that could lead to a pretty dramatic increase in local prices," AAA's Beth Mosher said. "Based on current market movements, motorists should expect an increase of at least 10 cents at the pump in the near term" for a gallon of regular.
The hurricane landed on the Texas Gulf Coast Friday and has affected an area that provides nearly half the country's refining capacity.
On Monday, Chicago-area base gasoline prices jumped by 5 cents a gallon at midday, Mosher said. The average in the Chicago metropolitan region was $2.54 a gallon.
Market forces are queasy about reduced supplies from U.S. Gulf Coast refineries and relatively thin inventories for the region, experts said.
If it keeps raining along the Gulf Coast and "ports, refineries, offshore crude production and pipelines remain closed, and if the terminals experience supply shortages - wholesale and retail prices may spike to slow down usage," predicted Bill Fleishli, Illinois Petroleum Marketers Association executive vice president.
Currently, Gulf Coast gasoline base prices are the highest witnessed in several years. It's "all tied to the worries about how much gasoline output will be lost," Mosher noted.
Fuel costs could continue to spike depending how long it takes the gas infrastructure to bounce back. Assessments of recovery aren't expected until the end of the week.