Gas prices ease a bit

The Department of Natural Resources snapshot of gas prices in mid-September finds them easing a bit. D-N-R fuel-price analyst Jennifer Moehlman says the price of a gallon of gas was a dollar-76 statewide, and a dollar-74 for ethanol-blended regular. It’s four cents lower than a month ago, and she says prices have gone down slightly because inventories are a bit larger than normal. But it’s 17-cents higher than a year ago because crude-oil prices are much higher. Could gas prices jump back up? Moehlman says it’s entirely possible. Right now the real “saving grace” is that high level of inventory, but she says the “cushion” could quickly be depleted if storms shut down refineries on the Gulf Coast, and we could see prices react much more quickly to the high crude-oil costs. Home heating fuel is going to cost Iowans more, though it’s too early to tell just how much. Both heating oil and propane are more expensive than they were this time last year, but natural gas is cheaper, mostly because we didn’t use as much this cooler-than-expected summer to produce electricity. The problem is this week that offshore oil rigs in the Gulf were shut down for Hurricane Ivan, which shuts off the production of natural gas as well, and there are still other storms on the horizon and several weeks of hurricane season to go. It’s “still a question mark” what kind of inventories will be on hand when the heating season begins, and inventories are only half the equation of supply and demand. The other half, the demand, will be determined down the road, depending on how cold this winter turns out to be.