Consumers in the southeastern United States are facing gasoline
shortages and high prices for fuel at a time when the price of crude
oil on the world market has fallen. As VOA's Greg Flakus reports from
Houston, the recent hurricanes that struck the Gulf of Mexico coastline
are the main reason for the shortages.
As recovery from
Hurricanes Gustav and Ike continues in Houston and in other parts of
the South, people trying to get back to work and normal routines are
being hampered by a shortage of gasoline. The problem is most acute in
the Atlanta, Georgia area, but also includes some other important
southern cities like Chattanooga, Tennessee, and Charlotte in North
Carolina.
Ken Medlock, an energy specialist at Rice University
in Houston says the closing of refineries prior to the two hurricanes
created a shortage in the gasoline distribution system for many areas.
"We had sort of a double whammy [hit]. Gustav resulted in about 15
percent of our nation's refining capacity being shut down, and Ike
added another 19 percent. So, the fact that those storms were back to
back means that for about three weeks, you had very limited refining
capacity in this country."
Medlock says the Department of Energy
is reporting the lowest gasoline inventories in the United States since
1967. But he says the problem will not last more than another couple of
weeks, as crews get refineries back up and running at full capacity.
Another
factor that will help lower fuel prices is the decline in crude oil
prices on the world market. The price for the most common benchmark
crude fell below $100 earlier this week, but it rose back over $100
after President Bush announced a renewed effort to get a financial
bailout package through Congress by the end of this week. The U.S.
stock market, which fell more than 770 points on Monday, regained some
ground Tuesday on the expectation that a deal will be approved.
Ken
Medlock says international crude oil prices follow these swings in the
market because they are influenced by expectations of demand for
energy.
"If the market really senses a full-blown financial meltdown,
you will see crude oil prices dip, because, if that does occur, then
the demand for crude oil should be a lot lower for some time to come,"
he said.
Medlock says an economic recovery would produce higher
demand for energy and could result in rising oil prices. But, he notes,
there are many factors influencing the price of petroleum, including
strong demand in China, possible disruptions in supply and the value of
the U.S. dollar.
Crude oil prices rose to over $140 a barrel
earlier this year, but dropped dramatically in the past couple of
months. Economists say a slowdown in demand was one factor. Some say
the market has also responded to moves by President Bush and the U.S.
Congress to open more U.S. coastal areas for exploration and
development, since that could potentially boost supply in the years
ahead.
