Analysts Say Hurricanes The Biggest Factor
Summer driving season is here, and it's so far so good for Houston drivers. The average price at the pump in the Bayou City is $3.35 a gallon according to Gas Buddy. That's down by more than two cents since Memorial Day, and about a penny cheaper than a month ago at this time. But will the trend continue? "We're expecting that these prices can continue to decline incrementally," says Gregg Laskoski, Senior Petroleum Analyst with Gas Buddy. "And I think you're going to see prices at the end of June even lower than they are right now." He tells KTRH the biggest factor in our relatively stable gas prices right now is higher supply coupled with lower demand.
There is, however, one major wild card that could disrupt the current downward trend. "Especially this summer, the one thing that's going to be the defining factor for gas prices is the hurricane season," says Laskoski. He explains that any hurricane activity could threaten oil refineries along the Gulf Coast, from Texas to Mississippi. "You're talking about investments where years ago (the refineries) might have been valued at $150 million to $200 million, while these days they might be valued in the billions," says Laskoski. "That's all the more reason why the oil companies operating these facilities have to be that much more proactive in shutting things down prematurely."
For Houston drivers, it just means one more reason to monitor weather conditions in the Gulf and be aware of storm activity. "Even if there's no direct damage, just the approach of a hurricane to the area would require refinery shutdowns," says Laskoski. "And when you have that type of activity, you do see wholesale and retail prices go up." The bottom line is for the next several months, the gas price forecast will largely be tied to the weather forecast.
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