Could Louisiana Gas Prices Rise Again Because Of Hurricane Ian?
When major weather events strike, particularly in the Gulf, one of the areas of the economy that is impacted is oil and gas. Disruptions to production and sharp increases in demand can have an impact across the country.
As Hurricane Ian made its way through the Gulf of Mexico, multiple oil and gas companies shut down production on offshore rigs and evacuated crews. BP and Chevron announced that they would be shutting down operations until further notice.
BP Plc (BP.L) and Chevron Corp (CVX.N) on Monday said they have shut-in production at offshore oil platforms in the Gulf of Mexico, as a powerful Hurricane Ian bore down on the top U.S. offshore production region.
The category 2 storm was in the Caribbean and forecast to become a major hurricane within two days. It was packing 100 mile per hour (161 kph) winds and expected to rapidly intensify as it crosses the Gulf's warm waters, the National Hurricane Center (NHC) said.
The storm is the first this year to disrupt oil and gas production in the U.S. Gulf of Mexico, which accounts for about 15% of the nation's crude oil and 5% of dry natural gas production.
The BP wells, alone, produce hundreds of thousands of barrels per day.
In a recent statement, President Joe Biden warned oil companies not to use Hurricane Ian as an excuse to raise prices "or gouge the American people."
But even as production may have stalled, the demand has spiked in Florida and the surrounding states. As of 6 a.m. Tuesday morning, more than 10 percent of gas stations close to the storm's predicted landfall were without gasoline.
While Louisiana may not see a major spike in gas prices, the steady downward tick of prices in the state could slow or stop, at least temporarily.
Aside from Ian, there is currently only one other storm - a tropical depression deep in the Atlantic that will be taking a northward path and avoid the U.S. entirely. The National Hurricane Center does not currently have any other system on its radar.