Price of Gas Back Above $2

The average price of gasoline has climbed above the $2 mark yesterday, marking the first time since mid November 2008 that gas prices have been so “high.”  Since the the first of the year the price of gasoline has risen 25%, or roughly 40 cents per gallon, and chances are pretty good prices will continue a gradual climb through the summer months.

Currently 27 states and Washington, D.C. are reporting an average gas price above $2 per gallon, with Hawaii being the most expensive at $2.50.  Utah currently has the lowest state-wide average price at $1.79 per gallon.

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Ike Cause Gas Prices to Jump

Over the past two days, the price of gas has jumped nearly five percent — or just under 20 cents — thanks to the damage caused by Hurricane Ike to Texas area oil refineries.

Even though nobody’s particularly happy about the jump in gas prices, things certainly could have been a lot worse.  For example, today’s national average gas price of $3.83 is up just slightly over the past week ($3.65) and month ($3.77).

However, it’s not as if all news is good news: today’s gas price is nearly 40% higher than it was at this time last year ($2.78).  Also, there are now 11 states reporting an average gas price above $4 per gallon.  Of these 11 states, seven are located in the southeastern part of the country.

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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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