Prices spiked particularly high in the Midwest because Isaac forced Shell to close a pipeline that delivers crude from St. James, La. to refineries in the region.
Gasoline prices are particularly vulnerable to spikes around this time of year. Refiners keep a low supply of more expensive blends as driving season ends, knowing they’ll soon be able to make cheaper winter blends of gasoline.
“We are really working with a just-in-time delivery system,” said Tom Kloza, chief oil analyst at the Oil Price Information Service.
Pump prices were on the rise even before Isaac blew in. The average price for gas rose about 40 cents from July 1 to mid-August because of higher oil prices and refinery problems in the Midwest and West Coast. At $3.80 per gallon, the national average is the highest since May 1 and well above the previous record for Aug. 29, $3.67 in 2008.
Wednesday’s jump of a nickel was the 10th biggest one-day jump on record, according to OPIS, and the biggest since the average price rose 6 cents on February 15, 2011 when turmoil in Libya was rising.
But prices could quickly come down if refineries can soon get up and running. Crude oil prices fell Wednesday and wholesale gasoline prices fell the past two days, suggesting the spike in retail gasoline prices could be short-lived. Americans will soon do less driving and the switch to cheaper blends will be well underway by mid-September.
That’s still too late for Sharon Simon of Gadsden, Ala. She’s driving 900 miles north to her daughter’s wedding in Olean, N.Y. this weekend, and will now have to spend an extra $30 to $50 on gasoline for the trip. “Just as we are getting ready to head out the prices go up,” she said. “I’m fed up with the surge in price every time there is a holiday.”