Last week’s attack on Saudi Arabian oil production facilities is being felt half a world away by Colorado Springs-area motorists as they fill up at service stations and convenience stores.
Local gasoline prices have spiked nearly 13 cents since the attack, sending the average price of a gallon of regular to $2.648 on Friday, up from Sunday’s average of $2.521, according to GasBuddy.com, the online service that tracks fuel prices nationwide. Colorado Springs prices are at a three-month high.
AAA, the nationwide travel service that also tracks prices, found a similar increase. Regular gas averaged $2.666 a gallon Friday in the Springs, almost 14 cents higher than a week ago, AAA figures show.
The worst of the price hikes might be over, said Patrick DeHaan, GasBuddy’s head of petroleum analysis, via email.
He expects prices to rise for a few more days but at a slower pace. Motorists are looking at perhaps paying another nickel a gallon, DeHaan said.
AAA Colorado spokesman Skyler McKinley echoed that sentiment; he predicts another week of increases and a 5-cent jump.
But in a worst-case scenario, the price hike could total 25 cents a gallon, McKinley said, based on the analysis AAA officials have seen.
“We’re already getting in that neighborhood,” he said. “I don’t think we’ll go beyond it, and I don’t think it will last beyond the month.”
Seasonal changes — cheaper winter blends and reduced demand for gasoline as the summer ends — should help curtail price hikes, DeHaan said.
“By mid-October, I think we’ll start to see some relief,” he said. “The seasonal factors will start to work once the ‘coast is clear’ on the Saudi attacks (once they’ve restored most of their production).”
The price increases aren’t necessarily the result of a major loss of oil supplies, McKinley said. The attack on the Saudi facilities took away roughly 6% of the world’s crude market, while the United States doesn’t import as much oil as it did in the past, he said.
Gas price increases have been more a result of post-attack jitters, McKinley said. Global crude supplies before the attack were high, he said.
“It’s just a lot of agitation and nervousness surrounding the crude market,” McKinley said. “It’s not that supply suddenly diminished so grandly that the market is constricted. It’s rather whenever there’s an attack like this on the oil market, people tend to get nervous and habits change.”
But DeHaan and McKinley warned that future attacks or other disruptions of oil supplies could again drive up prices. Houston, for example, saw major flooding this week because of Tropical Depression Imelda, which shut some refining capacity and could affect gas prices, DeHaan said.
“My concern going forward is that (Saudi Arabia) now appears more vulnerable than I would have thought,” DeHaan said. “What else will Iran do moving forward? They’ve continued to up the ante in recent weeks and becoming more isolated with less to lose. ”