Gas prices peaking?

Hurricane Irene has come and gone and American drivers are saying “good riddance.” The Labor Day holiday weekend marks the official end of summer vacation and driving season and the transition to winter gasoline blends., which could have an impact on gasoline prices this fall. This weekend,approximately 27.3 million Americans, including 776,900 Virginia residents, plan to travel to their holiday destination by automobile, AAA Mid-Atlantic is projecting. As they go, they will face a stiff headwind at the gas kiosk. For the first time in four weeks,average retail prices rose nationwide.Nationally, the price at the pump peaked at  $3.98 per gallon on May 5. It is down to $3.65 at the start of the Labor Day weekend, according toAAA’s Daily Fuel Gauge Report.

Thesummer weekly gasoline peak price may be behind us,but we are still paying nearly a dollar more for a gallon of gasoline than we did last Labor Day. The demand for gasoline usually drops by five percent after Labor Day as we settle back into our routines and as stations across the nation and region start selling less-expensive winter fuel blends as the weather gets cooler around mid-September. That normally leads to lower gasoline prices.  But this is an abnormal pricing year. Here’s ample proof:gas prices have remained above $3.50 per gallonfor the 26th week in a row.This leads energy watchers to believe the so-called “summer-winter gasoline price gap” will remain wide, meaningwe might not we see much cheaper pump prices when the refineries begin producing the winter fuel mix.

Heading into the weekend, the latest dismal unemployment report – no new jobs were added in August – caused NYMEX futures to sink. But this year, there is a huge disconnect between crude prices and pump prices and gasoline prices should be much lower than they are now.

“One week after Hurricane Irene wreaked havoc on the East Coast, all eyes are on Tropical Depression 13 (we are not superstitious, but it has the ring of bad luck) now known as Tropical Storm Lee, and the Gulf Coast region.What happens there this weekend could impact pump prices in the immediate future,”said Windy VanCuren, Public Affairs Specialist for AAA Mid-Atlantic. “The storm is a rainmaker and could drop 24 inches of rain on the region and it is already shutting down some oil and natural gas production in the region.After all, ‘nearly half (49%) of U.S. refinery distillation capacity is located in the Gulf Coast region,’ according to theEnergy Information Administration (EIA).”

Another weekend, another big storm is churning upon the seas. As it wends its way across the Gulf of Mexico, Tropical Depression 13 has triggered tropical storm warnings along the Louisiana Coast. That could, in turn, trigger a spike in crude prices and pump prices. All eyes are on the region. After all, the Gulf of Mexico normally pumps about 1.5 million barrels of U.S. crude per day. That’s a quarter of domestic output. The Gulf Coast is the location of nearly 7,000 oil rigs and platformsand oil companies have ordered their personnel to evacuate offshore production platforms. The Louisiana Offshore Oil Port (LOOP) has suspended marine operations. However, the Loop is continuing to make “oil deliveries to refineries from its onshore storage facility,” OPIS is reporting. As we learned six years ago this week with Hurricane Katrina, any disruption to the area could send pump prices skyrocketing.