STEVE INSKEEP, host:
As Lehman investors look over the disaster, people are waiting for a possible real disaster on the Gulf Coast. Hurricane Ike is approaching, and that has sent wholesale gasoline prices soaring, even as crude oil prices are falling around the world. NPR’s Scott Horsley explains.
SCOTT HORSLEY: Hurricane Ike is expected to spare most of the offshore drilling rigs in the Gulf of Mexico, so crude oil prices have continued their downward slide. At one point yesterday, crude was selling for little more than $100 a barrel.
On the wholesale gasoline market, though, it’s a different story with prices soaring to record highs along the Gulf Coast. Tom Kloza of the Oil Price Information Service says that’s because Hurricane Ike is bearing down on the Texas refineries where nearly one out of every four gallons of U.S. gasoline is produced.
Mr. TOM KLOZA (Oil Price Information Service): If you were an evil warlord and you decided to create weather and send a hurricane to the place where it would be most devastating to the U.S. petroleum economy, you would be hard-pressed to come up with a route that varies much from where some of the models suggest that Ike is going to come ashore.
HORSLEY: Some refineries in and around Houston have already shut down as a precaution while others up and down the Gulf Coast are keeping a close eye on the weather.
Even if the storm does no lasting damage, the temporary outage is likely to push gas prices higher. Kloza says the average retail price could easily top the $4 mark after falling to a four month low.
Even as refineries shut down, retailers are trying to keep gas stations along evacuation routes supplied as long as possible. In some cases those stations are reportedly rationing fill-ups.
Scott Horsley, NPR News. Transcript provided by NPR, Copyright NPR.
