Saturday, August 27, 2011

Irene hits gasoline prices

Retail gasoline prices in the New York area rose sharply Friday, as Hurricane Irene threatened to roll over the city on Sunday.

Price tracking website showed many areas of the city, Long Island and Connecticut where gasoline was selling for more than $3.90 US a gallon, 30 cents higher than the national average.

Consumers were filling up as reports suggested refineries along the U.S. east coast will likely close. There are 10 refineries in the area that could be affected, responsible for more than seven per cent of total U.S. capacity.

Gasoline futures climbed on the New York Mercantile Exchange yesterday, closing with a gain of 4.59 cents, or 1.6 per cent, to end at $2.80 US a gallon.

With no companies announcing any closures, gasoline had given back some of that gain Friday, to close at $2.78.

The National Hurricane Center downgraded Irene to a Category 2 stormFriday morning and by 2 p.m. ET reported that its maximum winds had decreased to 155 km/h as it came within 500 kilometers of Cape Hatteras. It is forecast to affect a broad area, from North Carolina to Eastern Canada, with flooding and winds as high as 190 km/h.
Refineries are already starting to turn off equipment and tie things down.

Some forecasters think Irene could be the worst hurricane to hit the U.S. Northeast in 50 years.

"Even if the storm eventually misses them, they can't take chances," says Ben Brockwell at the Oil Price Information Service, which monitors fuel shipments around the country.

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