Ernesto to force GR gas price hike!

Happy Friday to everyone, finally getting some cheaper prices around town that I have been predicting for the last two weeks. Its nice to see 2.57 at the pump again, but it’s NOT going to last!

Currently, believe it or not, Michigan is seeing some of the cheapest gas prices in the nation- the lowest station I can find in the U.S. is the Flying J near Toledo, OH at just 2.50 per gallon.

However, I have been tracking a new tropical depression which is forecasted by the NHC to become a hurricane in the next few days before heading straight for the Gulf. The Gulf of Mexico is extremely warm right now (as is typical in late August) and it could really strengthen Ernesto. Wholesale gasoline prices have ALREADY gone up about 7 cents as traders worry that this hurricane may shut in more oil production and that would be a mess. Keep in mind that Prudhoe bay is now only producing 110,000 barrels a day after a pump caused 90,000 more barrels to go offline. The LOOP offshore oil unloading platform is also in the Gulf, where about 10% of the Gulf oil prduction is STILL offline due to Katrina last year.

This could get bad in terms of seeing a price hike. If your labor day plans are sensitive to gas prices, I can’t see a good result for you. If things get as bad as they were for Katrina last year, we COULD see wholesale prices go up FIFTY cents per gallon in just a few days time, which would bring pump prices to 3.29 or 3.39. That is a worst case scenario, but if this storm hits east of Texas, it is a reality.

I would keep your tanks full and expect a hike early next week because I am expecting prices to rise Sunday night when traders will know the projected path better.

I would also like to announce my new gas price website, http://www.thegasgame.com. Check it out for all my predictions, and subscribe to the RSS feed if you wish.

Remember, watch the news for Ernesto’s path, and keep those tanks full starting Sunday!

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