You may live in the Midwest or along the West Coast — far from any hurricane hotbeds — but Hurricane Matthew still might impact the price you pay at the pump.
Petro Global News says it’s unlikely that Hurricane Matthew will affect oil and gas production in the Southeast or elsewhere in the U.S. Still, the storm is expected to cause fluctuations in fuel supply and demand in the coming weeks, which could make gas prices yo-yo.
Matt Smith, ClipperData’s director of commodity research, tells CNBC.
“Hurricane activity can have a mixed impact on supply and demand; while supply disruptions can be a bullish influence, the dent to demand caused by inclement weather can serve to offset this.”
Although some gas stations in Florida ran out of fuel earlier this week as motorists rushed to fill up their cars and extra gas tanks, Florida Gov. Rick Scott says the Sunshine State has a six-day supply of gas, even if all ports were to close, reports USA Today.
Retail gas prices tend to dip after the Labor Day holiday, as summer travel winds down and more motorists fuel their vehicles with a winter blend of gas that’s cheaper at the pump because it’s less expensive to make, says UPI. However, prices haven’t fallen this year due to pipeline and refinery issues in the U.S. South.
So while you may be seeing slightly elevated gas prices right now, it’s expected that the demand for fuel will drop in the coming days, as fewer people take to the roads in the Southeast.
“This is a demand destroyer. That’s the bottom line,” Tom Kloza, the global head of energy analysis at the Oil Price Information Service, tells CNBC.
That drop in demand is likely to offset the higher prices you’re currently seeing at the pump. Bespoke Weather co-founder Jacob Meisel tells CNBC:
“Essentially, [Hurricane Matthew] could add some volatility … but the net will be just slightly bearish over the next couple of weeks as the ensuing demand falloff should be larger than the spike we are seeing ahead of the storm.”
How much are you paying to fill up your gas tank in your region? Share your comments below or on our Facebook page.
How to earn $30 in less than 30 seconds
Earn extra money by using Rakuten (formerly known as Ebates) — a site that gets you cash back at more than 2,500 stores. As a bonus for joining Rakuten between now and Aug. 6, 2020, you'll earn $30 when you spend at least $30 shopping online through Rakuten within the first 90 days. Start earning cash back and claim a free $30 bonus today.