Hurricane Sandy could mean lower gas prices

Thursday, November 01, 2012

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Fred Shropshire
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RALEIGH (WTVD) -- Hurricane Sandy could actually drive gas prices lower according to a local economist.

In North Carolina, the average price of a gallon of regular has dropped 13 cents in one week, which makes it the fastest rate in weeks. The state's current average is $3.42 per gallon.

N.C. State economist Dr. Mike Walden said the low prices will probably last for the rest of the year.

"We're enjoying a period right now where prices are significantly lower than we saw nine months ago," said Walden.

Walden said it is due in part to dwindling travel this time of year. He also attributes a slower world economy, ample oil supplies and a silver lining from a destructive super storm.

"We've got the recent phenomenon of Sandy, which is causing the Northeast to virtually come to a standstill. That's going to probably put an extra push down."

Analysts call it "demand destruction." People in the Northeast are unable to fill up because of power outages, which leave more gas out there for the rest of the country to consume.

In 2005, Hurricane Katrina, which shutdown major Gulf Coast refineries, left the country with a gas shortage and higher prices.

"I wouldn't be surprised to see gas prices drop significantly over the next week or so, then maybe rebound a little bit, but then continue their downward spiral," said Walden.