Gas prices continue rise, could reach $3 mark

ALBANY — Gas prices continued their sharp increases, moving up more than 28 cents a gallon overnight to reach an average of $2.554 in metro Albany on Friday.

The price jump associated with Hurricane/Tropical Storm Harvey has been exacerbated by uncertainty over refineries and by motorists flocking to gas stations in attempts to beat the next price uptick or in anticipation of fuel shortages that market experts say will be self-induced if they develop.

While motorists in Georgia and the Albany area may be looking at gas hitting $3 a gallon as the nation’s fuel production recovers from the devastation of Hurricane Harvey, the Colonial Pipeline is expected to go back online this weekend and a number Houston-area refineries are preparing to go back into operation, which should combine to slow price increases and begin to moderate gas prices.

Allison Mac, a petroleum analyst with GasBuddy.com, which surveys gas stations nationwide, noted that Albany increased 45 cents per gallon in a week, with 28.4 cents coming between Thursday and Friday.

“That was a very big jump,” Mac said. “It has a large part to do, not necessarily with the Colonial Pipeline being shut down, it’s because there’s not enough supply being sent through that pipeline to Georgia and a lot of the Southern states.”

GasBuddy’s survey had metro Albany slightly above the state average of $2.549, which was up 8.4 cents overnight and 34.6 cents from last week. Both Albany and Georgia were above the national average Friday of $2.537, up 2.5 cents overnight and 18.1 cents above the previous Friday.

If the pipeline, a major fuel artery in the East, reopens as expected this weekend, it will provide relief to the market, Mac said.

“The thing that is going to provide some relief for us is there are some refineries in Houston that are slowly coming back up,” she said. “Production is going to happen again. Once the waters subside, we should see more production. That’s definitely going to help with the price.”

Asked whether Georgia could see its average gas price hit the $3 mark, Mac said retail gas will continue to go up “for the next week or so. So, it could get pretty close to $3. But relief should be happening starting next week.”

“The market increases pretty dramatically because there is so much that’s unknown, especially when it comes to Mother Nature, when it comes to a natural disaster,” she said. “There’s so much we cannot predict. That’s why prices go up (quickly). When prices go down, it usually takes a little longer because it takes a while for production to ramp up.”

While supply is still adequate to meet needs, motorists who are buying more than normal are contributing to problems such as individual stations running out of gas, which can snowball by causing a panic.

“That is a lot of the reason why there are gas stations running out of gas,” Mac said, “because of this knee-jerk panic reaction, which is really self-induced. People are hoarding gas, which is causing a shortage (in some places). I don’t want to cause any fear and have people running out there with huge (gas) jugs to fill up and have it in their garages.

“A lot of people are scared, and that’s why they’re driving out there and getting a lot of gas they don’t necessarily need.”

Sources in the Northeast are shipping gas supplies South to help, and other refineries are still operating normally, she said. Harvey’s impact resulted in about 22 percent of the nation’s refinery capacity being shut down.

“It’s not like there’s going to be zero gas,” she said. “There’s a leaner supply, obviously. It depends on how many refineries are operating, and 14 were shut down. But there is gas out there. It’s just not at the large amounts we were seeing.”

Market watchers are also keeping an eye out for the next potential tropical storm issue — Hurricane Irma. While still out in the Atlantic, Irma’s track is still uncertain except that it’s moving westward toward the United States.

Irma is expected to reach major hurricane status — category 3 with sustained winds of at least 111 mph — Sunday. It is not expected to reach land masses such as the Dominican Republic before mid-week.

Under a best-case scenario — Houston and other refinery production areas in the Gulf Coast area quickly recover and Irma doesn’t make landfall in the United States — gas markets could start moving toward normalcy next week.

“Prices are going to go up until next week,” Mac said, “Prices are going to to up, but we should see the jump won’t be as dramatic.”

She said she doesn’t expect markets to approach the historic highs of September 2008 when Ike slammed the Gulf region.

“I don’t see anything quite that dramatic (in price increases),” she said. “When Ike hit, oil prices also were very high during that time. There were various factors going on in 2008. This is definitely a refinery issue. I’m looking at the cost of oil right now, and it’s $46 a barrel, the same amount that it’s been this entire year.”