Why do gas prices go up as hurricanes start approaching?

Question

I think that's pretty messed up..don't you think?

Answer 1

no. it makes perfect sense, because hurricanes often come through the Gulf of Mexico, which (other than alaska) is where a large portion of US produced/refined oil comes from.  

Answer 2

Great question..I've always wondered that myself.

Not fun evacuating and they run out of gas no matter what the price!!

Answer 3

The economists call it speculation. "If" the storm causes damage to rigs, then the supply will be hurt. Then demand rises...and on and on.

I do however agree, it's a b.s. way to jack up prices. But speculation is used in economics as a gold standard for prediction.

Answer 4

The storm (if its bad enough) can damage and put the oil drilling platforms out of service which in turn lowers the in flow of oil coming into the market.  Everybody jumps  to  soon when this happens because we have a huge stockpile and it really doesn't affect us that much.   Yea its  a  little  crazy to jump oil at the sight of a storm.

Answer 5

kinda, but people do stupid things for money

Answer 6

it makes no sense to me since the hurricane is so far away  

Answer 7

It's a result of a very sensitive market to anything that may cause even a small supply disruption.  If the system threatens areas where offshore oil platforms exist, they will be shut down and evacuated for safety concerns .    

Answer 8

This particular storm (Gustav) is projected to veer into the western Gulf where the refineries and oil platforms are.  When Rita and Katrina went through in 2005, they shut in almost a million barrels/day of production and damaged several refineries.  Gustav may approach their strength.  We have become increasingly dependent on Gulf of Mexico oil, so prices rise more if it is threatened.

DK