Hurricane Ida’s blow to the oil industry is probably making this Labor Day the most expensive for U.S. drivers since 2014.
The storm left parts of the country’s Gulf Coast oil-refining hub in the dark and, for a day, it halted flows on the main pipeline that ships the gasoline made there to East Coast markets.
The national average price for regular unleaded gasoline should climb to $3.18 a gallon this weekend because of tight supplies, said Patrick DeHaan, head of petroleum analysis for retail tracker GasBuddy. The price was already close to that prediction on Monday, at about $3.15 a gallon, according to Auto club AAA.
As of Monday, the average price per gallon of gasoline in Washington state was $3.90, according to AAA. Gasoline in Washington tends to be more expensive than the national average because of a number of factors, including a higher state gas tax.
“It’s too early to know the full impact of any damage Ida caused on the oil and gas industry, but motorists regionally can expect price fluctuations leading into Labor Day weekend,” said Jeanette McGee, AAA spokesperson.
Ida is just the latest blow to a refining industry that saw demand plunge last year because of the pandemic, with several plants shutting down since, followed by a devastating deep freeze in Texas last winter. For drivers, the hurricane came at a time when gasoline prices would typically start dropping as refineries look to replace their stockpiles with winter-specifications fuel.
Colonial Pipeline, the top U.S. gasoline shipper that was hacked earlier this year, stopped its Line 1 and Line 2 to check for hurricane damage, but planned to resume shipments Monday evening. The lines each carry more than 40 million gallons of fuel a day from the Gulf Coast to distribution points in North Carolina.
DeHaan said he was sticking with his prediction even after Colonial announced the return of shipments, because he was still waiting for damage updates from refineries.
New York Harbor stockpiles “are already low,” and the tight supply should attract additional gasoline cargoes from Europe, Zachary Rogers, director of global oil service at Rapidan Energy, said before Colonial announced the pipeline restarts. East Coast gasoline inventory this month has been at a seasonal eight-year low, Energy Information Administration data show.
Supply was especially tight within Louisiana as many gas stations in the state were without power, according to the U.S. Energy Department.
Exxon Mobil, one of the largest refiners in Louisiana, was arranging with independent distributors and wholesalers to move fuel to “the most severely impacted markets.”