Hurricane Gustav Update – Better Than Expected

Hurricane Gustav made landfall this morning near central Louisiana at roughly 10 a.m. as a Category 3 storm, packing winds of over miles per hour. Fortunately, since making landfall, the storm has been downgraded to a Category 2, and how has sustained wind gusts of over 110 mph.

The major concern now that Gustav has made landfall is the storm surge that is likely to come as the back half of the hurricane comes around the shoreline. Most forecasts predict the surge will be between 8 to 12 feet.

Clearly what has happened so far has been better news than what was forecast even 18 to 24 hours ago, when most meteorologists were predicting Gustav would strengthen to at minimum a Category 4 storm before making landfall.

And, thanks to this better than expected news, the price of oil has fallen, and the price of gasoline has remained relatively stable.

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Gustav Strengthening – Go Fill Up NOW!

Now that Hurricane Gustav has made it through Cuba, and entered the Gulf of Mexico as a strong Category 3 storm – with sustained winds of 120 mph – it’s high time that you go out and fill up your car, truck or SUV.

Based on the current projected storm path, Gustav will very likely make landfall somewhere between Galveston, Texas and Gulfport, Mississippi. In terms of gas prices, this is important because this area of the Gulf Coast is home to many of the region’s oil refineries. These facilities account for nearly 40% of the United States’ refining capacity.

Keep in mind, when Hurricane Katrina made landfall in the Gulf Coast region, it did so as a Category 3 storm. Should Gustav do as many forecasters are predicting and strengthen to a Category 4 before making landfall – meaning it would have sustained winds between 131 and 155 mph – chances are good that we could see even more damage to oil production facilities and refineries than what we did back in 2005. This certainly does not bode well for prices at the pump.

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Gas Prices Climb For First Time in Nearly 45 Days

The national average price of a gallon of regular unleaded gasoline climbed by 1.1 cents today – up from $3.68 to $3.691 – marking the first daily price increase in 43 days.

Since hitting its record high of $4.12 per gallon on July 16, the price of gasoline has fallen or remained steady, up until this morning.

Currently, only Hawaii and Alaska are reporting state-wide average gas prices above $4 per gallon, at $4.55 and $4.40, respectively. New Jersey has the lowest state-wide average gas price at $3.44 per gallon.

But, keep in mind, while the recent price declines have come as a welcome relief, we’re still paying more than a third more for gas than we were just a year ago.

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