How Hurricane Sandy will affect gas prices will depend on how much damage it causes and how long oil production slows.
On the one hand, the drop in demand on the East Coast as businesses shut down, mass transit and airline travel stops and people stay home could bring a slight drop in gas prices here, predicted Phil Flynn, a gas industry analyst for the Price Futures Group in Chicago.
Already, on Monday, crude oil prices fell $1, or 1.1 percent, to $85.32 a barrel.
Tom Kloza, chief oil analyst at Oil Price Information Services, said he expects the drop in demand for oil and refined products “will be about as significant as we’ve seen since Katrina made landfall” in 2005.
But on the flip side, if East Coast refineries are hammered, consumers could be, too, said Beth Mosher, spokeswoman for AAA Chicago, pointing to the Phillips 66 Bayway Refinery in Linden, N.J., which processes about 240,000 barrels a day and is directly in the storm’s path.
On Monday, Phillips shut the Linden refinery, and most other big refineries in the Northeast were running at reduced capacity.
Illinois gas prices have been trending downward, as is expected this time of year. The average price of a gallon of regular unleaded gas was $3.496 on Monday, down from $3.957 one month ago, according to AAA’s fuel gauge report.