Hurricane Sandy left of trail of destruction on the East Coast, but the so-called super storm could also leave lower gasoline prices in its wake.
Tom Kloza, oil analyst at Oil Price Information Services, believes gasoline could temporary rises in parts of the country, but the vast majority of the U.S. could see lower prices due to the storm.
“My guess is we’ll have 20 to 25 states that will have prices below where they were a year ago,” he told CNBC. “It could be in the $3.40s (a gallon) by next week. There’s a huge swatch of the country that’s going to be getting closer to $3.”
Kloza told CNBC lower demand due to Sandy likely would prompt gasoline to drop nationally. The storm also hit as gasoline prices had been falling and when demand traditionally drops in the U.S.
Houston prices are averaging $3.31 today, a drop of 9 cents over the past week, according to AAA gas gauge. The Texas average is down 10 cents over the past week to $3.31.
Two of the Northeast’s nine refineries were knocked out of commission by Hurricane Sandy this week. Three refineries, which represent about 420,000 barrels a day of refining capacity, suffered no impact and are returning to normal operations today, the Associated Press reported.
However, it isn’t all good news.
Northeast residents will struggle to get gasoline in the coming days because of transportation problems due to Sandy, Kloza told the AP.
“I expect lots of ‘no gas’ signs and little price movement until logistics can catch up with downstream markets,” he told the AP.