Gas prices near $3 dollars as oil and fuel companies recover from recent storms

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BATON ROUGE, La. (BRPROUD) — You may have seen gas prices slightly increase over the past few weeks. This is as the oil and fuel industry start to get back to business as usual after Hurricane Ida.

Some oil companies had to shut down, while others had to find ways to distribute the gas during the storm. Companies are now doing better, however, the impact of the storm still lingers.

“I think most people got sticker shock at the gas pump right now in some parishes, especially in some of the coastal parishes. Already at three dollars and well above three dollars a gallon,” said American Automobile Association (AAA) spokesperson Don Redman.

He said prices have climbed because the economy is now starting to catch up from the blow it took from the last few storms.

“They’re asking, what is going on, and is it coming to me? If it hasn’t come to you soon it very maybe. We’re looking at a statewide average of 2.95 a gallon,” he said.

“There are still some people who have production issues offshore. A lot of the problems were the power supply at the plant, not necessarily the upstream side but more the downstream side, but the oil and gas companies are pretty much back to where we need to be,” said Louisiana Oil and Gas Association (LOGA) President Mike Moncla.

AP News reported that oil giant Royal Dutch Shell warned that it may take an earnings hit of up to $500 million after this past month.

“When they are talking about a multimillion-dollar impact, it absolutely would be for those companies who had to shut down production and weren’t able to start back up until weeks after,” Redman explained.

Several other external factors also played into this surge.

“The prices you’re seeing for oil and gas are more than just Ida. It’s due to politics and policy,” said Moncla.

“A lot of our refining is coming back online. Oil production is coming back online. The biggest impact is what’s going on globally. It’s where our oil is sold. Right now it’s being sold for 78 a barrel, before Hurricane Ida it was being sold for 62 gallons a barrel,” Redman said. “Our inventories for gas and oil are much better than a month ago after Hurricane Ida, but there is surging demand in the U.S. and globally that’s really putting pressure on oil prices.”

However, the future for the oil industry and your gas prices are not completely dim.

“Throughout the state, for all of the oil and service companies, we’ll have more activity out there. So, it’s a positive,” said Moncla.

“We are crawling our way out of there. I think we are in a much better position than even last week. So each week we’ll see advancement and that’s what gives me hope. Things start to stabilize in the next coming weeks instead of increasing,” said Redman.

Redman also said that after oil and fuel companies had to work their way out of this situation. He does believe some will make changes in infrastructure or procedures so they can recover quickly after big storms like Hurricane Ida.

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