U.S. gasoline prices are expected to rise slightly over the next two weeks asdisrupts fuel supply, experts said.
According to energy research firm S&P Global Platts, about 95% of oil and gas production on the Gulf Coast was shut down as Ida entered the region on Sunday. The storm made landfall near Port Fourchon, Louisiana around 1 p.m. with maximum sustained winds of up to 150 miles per hour. By early Monday, Ida had weakened to a Category 1 storm but 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” when Ida landed.
Experts have said that shutting down energy facilities will lead to temporary gas price hikes. Patrick De Haan, head of petroleum analysis at research firm GasBuddy, said in a Tweeter that pump prices are likely to rise at least 5 cents per gallon nationally and could go higher. But he does not expect a drastic increase in gas costs.
Other experts believe fuel prices could see a bigger increase. Boston College economist Brian Bethune predicted gas could jump at least 20 cents a gallon depending on how long production shutdowns last.
The average price of a gallon of regular gasoline has hovered around $3.08 in recent weeks, down from around $2.16 in January, according to the US Energy Information Administration.
By noon Monday, U.S. crude oil prices had risen 0.5% to $69.07.
Mark Zandi, chief economist at Moody’s Analytics, said the disruption caused by Ida would likely lead him to cut his forecast for annual U.S. economic growth in the current quarter by a few tenths of a percentage point. But that could be reversed over the rest of the year as the region rebuilds.
After the Colonial Pipeline ransomware hack in May, some states saw prices rise sharply as gas stations ran out of gas. With Ida, prices are only likely to skyrocket if people panic again and rush to gas stations, according to De Haan.
“There will be NO shortage of gas because the gas pipeline is temporarily out of order, the only one humans are creating by flooding the system,” he tweeted.
Colonial plans to resume full service once it assesses its infrastructure after the storm, the company said in a statement Sunday.
The Associated Press contributed to this report.