Gas prices fluctuate as Tropical Storm Isaac swirls inland
Published Wednesday, August 29, 2012 11:54AM EDT
Last Updated Wednesday, August 29, 2012 10:33PM EDT
Crude oil prices fell and gas prices were poised to head in the same direction overnight Wednesday as G7 leaders urged oil producers to ramp up output and the once-erratic Tropical Storm Isaac showed signs of weakening.
Isaac evolved into a tropical storm over the Gulf of Mexico earlier this week, eventually forcing 95 per cent of oil production and refinery operations in the region to pause.It made landfall Tuesday as a Category 1 hurricane.
The development managed to nudge up oil prices, but those costs now are dropping on a call to action from the world’s leading economies and optimism that production will return to normal.
Benchmark oil fell 84 cents to finish at $95.49 per barrel on the New York Stock Exchange. Brent crude, which is used to price international varieties of oil, fell 4 cents to $112.54 per barrel in London.
While gas prices spiked across the U.S. and in Canada on Tuesday, websites like TomorrowsGasPricesToday.com predict that drivers will be paying less at the pumps on Thursday.
However, prices will likely rise again as Labour Day weekend approaches.
Meanwhile, Isaacwas downgraded to a tropical storm Wednesday afternoon, and isn’t expected to strengthen as it swirls through Louisiana; it’s still unclear how much damage the storm will cause as it churns along the northern Gulf Coastand toward Arkansas.
The price of gas can be fickle and is determined on a day-to-day basis, said Dan McTeague, founder of TomorrowsGasPricesToday.com.
But refineries tend to pass increases onto companies and consumers almost instantaneously, McTeague told CTV News Channel in a Tuesday interview from Toronto.
“The reality here is that because of a lack of competition, whatever volatility that you see internationally, we pay for it here domestically in a nanosecond.”
Canadians heading into the Labour Day weekend can expect gas prices to rise and would be wise to fill up overnight on Thursday, according to an outlook on McTeague’s website.
Oil prices may have slipped on Wednesday, but it’s still unclear what the storm’s legacy will be.
“The story has yet to be told and unfortunately for consumers it may be a long time before they see relief at the pumps, even well past Labour Day,” he said.
Days before Isaac turned into a Category 1 hurricane, oil companies began to prepare for its arrival -- withdrawing workers and stopping gas production in the Gulf of Mexico.
The U.S. government said Sunday that daily oil production in the Gulf was down 24 per cent and natural gas production was off 8 per cent.
Companies such as BP, Royal Dutch Shell and Apache Corp. evacuated platforms and withdrew workers as the storm tracked past the Florida Keys.
Also expected to affect gas prices, said McTeague, was a fatal explosion and subsequent closure at Venezuela’s biggest oil refinery -- the Amuay refinery. At least 41 people died in the blast.
The Amuay refinery is among the world’s largest.
With files from The Associated Press