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Published: Wednesday, 8/29/2012 - Updated: 3 years ago

Isaac helps boost local, national gas prices

Holiday weekend level predicted to be record


Gas prices were rising in the Toledo area and elsewhere Tuesday, thanks in part to Hurricane Isaac.

Benchmark oil rose 86 cents to $96.33 a barrel in New York as traders waited to see how much -- and for how long -- the storm's powerful winds and driving rains will affect oil production and refinery operations in the Gulf of Mexico.

The average price for a gallon of regular unleaded gasoline in the Toledo area was $3.892 late Tuesday afternoon, up about 17 cents a gallon from Monday and about 27 cents from a week earlier, according to gasbuddy.com, which is available at toledoblade.com/gas.

Nationally, prices at the pump will be the highest ever for the Labor Day holiday, AAA said. The national average was $3.782, according to gasbuddy.com.

Nearly 94 percent of oil production in the Gulf, or 1.3 million barrels a day, has been halted, the U.S. government said Tuesday.

At least 1 million barrels a day of refining capacity -- about half the refining capacity in the storm's predicted path -- is expected to be shut down.

The United States consumes about 19 million barrels of oil products daily.

"We have to wait and see. A lot of refinery capacity was taken down and the key is going to be how the restart goes," said Andrew Lebow, senior vice president of energy derivatives at Jefferies Bache LLC.

Refineries should escape significant damage if Isaac remains a Category 1 storm.

The bigger issue is whether they'll have access to electricity. Some analysts say they could be up and running within hours without damage or a loss of electricity.

Others say they are likely to be out of operation about three days.

The situation spurred speculation that President Obama will release supplies from the Strategic Petroleum Reserve to ease prices for consumers.

"That option remains on the table," White House press secretary Jay Carney said Tuesday. "We have no announcement to make today."

Part of the recent price rise has been blamed on a deadly explosion and fire at Venezuela's biggest oil refinery. The fire was extinguished Tuesday after burning for three days, officials said.

The United States imports about 360,000 barrels of gasoline a day from Venezuela. The fuel is delivered to the East Coast.

In Michigan, State Attorney General Bill Schuette issued a warning that gasoline price gouging is illegal in Michigan.

Mr. Schuette said in a release Tuesday that higher gas prices are likely, but circumstances, including Hurricane Isaac, "are not a free pass for price gouging."

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