Gas prices would normally be dropping during this time of year, but there is one big factor preventing that from happening…the lingering impact of Hurricane Ida.
“Oil production in the Gulf of Mexico had basically completely shut down in Ida’s wake and it has taken a long time to restore that production completely,” said Patrick DeHaan, head of petroleum analysis for GasBuddy. “The fact that so much of that Gulf of Mexico oil production was offline for a significant amount of time has led to the decline of about 35 million barrels of crude oil that would have otherwise been produced. So we’re looking at a pretty big deficit.”
Hurricane season is still going on, so DeHaan says the decline in oil production may not be completely over, even though he doesn’t foresee another hurricane like Ida happening.
“Prices are still moving back down slowly. That’s still leaving us about six cents higher than where we were a week ago,” said DeHaan. “Prices tend to cycle. They go down and then up. Last week, they shot up. Prices have come down about two cents on average in Indianapolis since last Wednesday. That’s the direction it will probably move for the remainder of this week. Depending on the way the market moves, that sets us up for a price hike either extremely late this week or next week.”
Demand for gas is down for the fifth straight week nationally.
“That’s not a surprising trend. Everyone is getting back into their routines. Schools are reopened. That means less people are hitting the road,” said DeHaan.