Storm Warning: Hurricanes May Drive Gas to $6

Disruptive Atlantic season could upset already dicey market
By Jim O'Neill,  Newser User
Posted Jun 2, 2008 12:39 PM CDT
In this April 21, 2008 file photo, oil tankers are seen moored near the Chevron refinery in Richmond, Calif.    (AP Photo/Ben Margot, file)
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(Newser) – This year’s hurricane season—which started yesterday—could spawn a dozen or more named storms, potentially disrupting flow of gasoline across the nation and pushing gas prices beyond $5 or even $6 a gallon, reports CNNMoney. Traders already appear to be including a hurricane premium of 10 cents per gallon into prices, something they’ve done since hurricanes Katrina and Rita in 2005.

Another Katrina could make prices go "absolutely crazy," says one analyst, noting the impact on refineries along the Gulf coast. "The last thing this market needs at this time is a hurricane, because we can't afford to lose any of our refining capacity." An uneventful season—which runs through November—could mean lower prices, however.