Just as post-Hurricane Katrina fuel prices start to slide, another hurricane is threatening the Gulf Coast and promising to once again send fuel prices soaring.
The U.S. Department of Energy’s weekly report showed diesel at a national average of $2.73 per gallon as of Sept. 19, a slide of 11.5 cents from last week. However, forecasters warned that Tropical Storm Rita – now heading for the Florida Keys – could strengthen to hurricane status as it closes in on the Gulf Coast.
Crude oil spiked $4.39 a barrel Monday on the New York Mercantile Exchange, partly due to uncertainty over the storm’s path, and that OPEC leaders were reluctant to increase crude output, according to news reports. Rita is expected to hit either Texas or Louisiana by week’s end.
“Rita is already starting to be bad,” said Todd Spencer, executive vice president of the Owner-Operator Independent Drivers Association, adding that the oil price spike is based on pure speculation amongst an already spooked oil market. “Any disruption at all or threat of disruption can cause significant changes in oil costs, and significant changes are always up.”
Spencer said the “lousy” economic climate for truckers could be worsened by Rita or any other potential hurricane until the major storm season ends in November. Additionally, a harsh winter could send prices upward.
Many owner-operators, Spencer says, are cutting back on their operations, choosing only hauls that will pay top dollar. “I don’t see any immediate relief on the horizon,” he added.
Following Katrina, diesel prices spiked to record highs, crossing the $3-per-gallon threshold in some regions. With production shuttered along major pipelines from the Gulf Coast, diesel shortages and outages were reported in pockets across the country.
For the second consecutive week, all regions of the United States saw lower average prices. The largest drop was 12 cents in the Gulf Coast region, where prices averaged $2.677. The lowest average prices were in the Midwest at $.2648. The highest prices remain in California, where the average is $3.060