Oil prices took another swan dive Tuesday, falling more than $4 a barrel to flirt with the $90 threshold.
But in the wake of Hurricane Ike, Gulf Coast fuel supply operations remained a mess for motorists from Texas to the Northeast, with prices spotted well above $5 for a gallon of regular gasoline.
Motorists should brace for a return to $4 a gallon on average nationwide through mid-October, fuel experts said. The increase also will include California, which faces competition for its gasoline supplies.
"These are exceptional times. Crude oil is down, but those numbers are an indication of where gasoline prices are headed in the future, not the present," said Tom Kloza, chief oil analyst for the Oil Price Information Service in New Jersey.
Even before Hurricanes Gustav and Ike, refineries had been operating at lowered production levels for months because of declining consumer demand, Kloza said. That left little room for error.
Many petroleum facilities then closed in anticipation of Gustav's arrival and had not reopened when Ike hit the gulf. Then Ike's bigger footprint prompted more shutdowns of offshore production platforms and land-based refineries, terminals and pipelines.
On Tuesday, U.S. benchmark crude oil for October delivery traded as low as $90.51 before closing at $91.15 a barrel, down $4.56. Oil prices have plunged nearly $10 a barrel this week as investors have sought safety in cash, believing that Wall Street turmoil signaled more problems for the economy that would slow energy demand.
Kloza said that motorists who live in states supplied by Texas and Louisiana refineries would experience spot shortages of gasoline and extreme price differences as energy companies struggle to restart refineries and pipelines.
On average, U.S. drivers were paying $3.854 for a gallon of regular gasoline Tuesday, up 18 cents from Friday, according to AAA's daily survey of gasoline sellers.
On GasBuddy.com, the cost of a gallon of regular topped out at $5.21 at a station in Winchester, Tenn.
Some motorists were staggered by the sudden price jumps.
"I understand that there are shortages, but this is very suspicious," said Stephen Stone, 46, an engineer for the Metropolitan Transportation Authority who lives in Norwalk and drives a Xebra SD all-electric sedan that rolls on three wheels.
Stone has never felt better about his $12,000 purchase of the Xebra last year, even though it will go only as far as 40 miles on a charge under the best circumstances -- flat roads and no traffic.
