Hurricane blows up gas prices in Iowa

Gasoline prices took a big jump in the last week around Iowa, and Department of Natural Resources fuel-price analyst David Downing says you can blame Hurricane Lili. Downing says most of the cheap gas we’ve been burning this year is imported, and this fall’s tropical storm and hurricane in the gulf halted shipments of crude oil. That storm was expected to be a class-four hurricane, and Downing says that scared off tankers carrying crude from the Mideast.Refineries, terminals and pipeline facilities shut down to avoid damage and injury from the expected storm, so production shut down, no product came up to the Midwest, and prices went up here. That same slowdown’s blamed for a 53-percent jump in the price of natural gas for the upcoming winter’s heating needs. He says Hurricane Lili closed a lot of refineries that are busy this time of year producing stocks of winter heating fuel, which had been at three-52 per million BTU, an average price, but jumped to over four dollars. Downing says a year ago we enjoyed a big drop in natural-gas prices for home heating. Last year we were below two dollars per million BTU on the spot market, because following the previous year’s very high costs, a lot of exploration and new natural-gas production went on and that drove last year’s prices down to below average. Downing says though we enjoyed the low heating bills last winter, steady demand is better in the long run.He says it’s best for consumers if the price stays steady, about three-dollars per million BTU, because it encourages a “reasonable” amount of exploration while ensuring a steady supply of gas for summer electric generation and winter heating. Since the slowdown in crude-oil shipping was temporary, Downing says we may see gasoline prices drop once the supply rebounds and refineries can send more supplies here to the Midwest.