Hurricane Sandy’s effect on gas prices might not be what you would expect in the wake of a crippling super storm, but decreased demand as many Americans are stuck home or unable to return to workplaces that lack power may lead to a drop in gas prices following the disaster.
Sandy gas prices are expected to be lower than is anticipated for a number of factors. One is that only two refineries in storm-affected areas out of nine were affected, but demand seems to be the driving factor in lower than expected Sandy gas prices.
Phil Flynn, senior market analyst for independent futures broker the Price Futures Group, commented:
“You’ve got cities that are shut down, people not going to work, people not moving around … There’s so much demand that is not happening.”
Oil analyst Tom Kloza concurred, noting that while damage was widespread, high post-Sandy gas prices were not likely to result. Kloza explains:
“The country should not have any kind of an issue … New Jersey, Long Island, downstate New York, they’ll have issues, but they’ll mostly be related to lack of power.”
The Huffington Post reported post-Sandy gas lines in areas most affected by Sandy’s flooding and high winds, but also that lack of electricity rather than gas shortages are what is impacting the availability of gas:
“There were lines at stations in the hardest-hit areas. On Long Island, where power was out in most places, 30 cars lined up Wednesday morning at a Citgo station in Rockville Centre, N.Y., which had power in its central business district. There were 50 cars waiting at a nearby Gulf station in the afternoon. By evening, the Citgo and a nearby Mobil were out of gas, but the Gulf station still was pumping.”
As of yesterday, post-Sandy gas prices had dropped one cent to a national average of $3.52.