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Tropical Storms Make Gas Prices Soar

By: Whitney Holmes
By: Whitney Holmes

July 8, 2005

Melissa Miller is a housekeeper and she commutes an hour every day to and from work, not including all the house calls in-between.

But with the national gas price average expected to cross the $2.30 mark next week, she knows she will have to pay a lot more than the $75 a week she is already paying.

"Oh gosh, as far as budgets and everything else, it's just going to be ridiculous," she said.

The U.S. receives one third of its oil from the Gulf of Mexico and with tropical storm Cindy and Dennis making their way through the region, traders are afraid last year could be a repeat.

"Hurricane Ivan, that came in last year, impaired about 44 million barrels of production, over a lengthy period of time, which droves prices up," explained President of Tiger Fuel Co. David Sutton.

In the wake of Cindy, prices Wednesday hit a record high and spiked Friday for fear of what Dennis' destruction could do to an already slim oil production supply.

"Today, the price of crude went up 87 cents a barrel, and the price of unleaded went up about three cents a gallon," said Sutton about Friday's market.

Currently, the prices are fluctuating as a result of speculation. Not until the destruction of Dennis is known will we know the fate at the gas pump.

"If it causes a lot [of damage], we will see prices go up and stay up. If not, then the speculation will wane, and prices will come back down," explained Sutton.

But Melissa is already preparing for the worst.

"We have to try to figure out people that are closer together, change around the schedules," brainstormed Melissa about her house calls.

Gas prices typically increase during hurricane season, but the volatility of oil prices this year, and the damage of Ivan last year, render this year to be worse than most.


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