HOUSTON – The recent price jump at the pump could soon be over as more Gulf Coast refineries come back online following Hurricane Isaac.
Oil analyst Stephen Schork said recent swings in oil prices were due to a weaker U.S. dollar and refinery disruptions that resulted from the hurricane. While a substantial amount of oil and gas production remains offline, production is coming back as expected.
Thankfully, no major damage to oil platforms or refineries has been reported.
Labor Day’s gas prices were among the highest ever, with the Houston area averaging $3.80 a gallon, according to HoustonGasPrices.com.
While prices are expected to drop slightly in the coming weeks, Tuesday’s oil prices edged higher due to the weaker dollar.
Benchmark crude for October delivery was up 89 cents to $97.36 per barrel at late afternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract rose $1.85 to finish at $96.47 Friday. There was no closing price Monday because of a public holiday in the U.S.
Brent crude was up $1.58 at $116.15 on the ICE Futures exchange in London.
Hopes that the European Central Bank will play a more crucial role in resolving the continent’s debt crisis have helped support the euro against the dollar. After dropping to near two-year lows below $1.20, the euro has pushed back above $1.26. That pushes up the price of oil, which is traded in dollars and becomes cheaper for holders of other currencies when the dollar drops.
Oil analyst Stephen Schork said in a report that oil prices could see “increased volatility this week” due to the loss of a trading day Monday because of a holiday in the U.S.
The release Friday of U.S. nonfarm payrolls for August, a closely watched gauge of employment in the world’s No. 1 economy, also could impact prices, Schork said.
In other energy futures trading, heating oil rose 3.4 cents to $3.21 a gallon and wholesale gasoline was up 2.7 cents at $2.999 a gallon. Natural gas rose 0.9 cents to $2.79 per 1,000 cubic feet.