Aug 28 - Isaac, upgraded to a category one hurricane, along with a fire at Venezuela's biggest oil refinery are expected to push gas prices higher over Labor Day weekend and no relief is in sight beyond the holiday, according to analysts. Sasha Salama reports.
Gas prices are heading higher as the Gulf Coast braces for Hurricane Isaac. REPORTER BRIDGE: SASHA SALAMA, REUTERS REPORTER (ENGLISH) SAYING: "The government says the average price at the pump is already up to $3.78 a gallon with analysts telling me gas could go even higher by Labor Day. Here in New York, drivers are paying more than $4 a gallon." Energy companies along the Gulf Coast evacuated offshore oil rigs and shut down refineries, which turn oil into gas. Since about a-quarter of the nation's oil is produced in the Gulf of Mexico, fears of lower energy supplies also sent crude prices higher, a trend which could continue according to trader Ira Eckstein. SOUNDBITE: IRA ECKSTEIN, PRESIDENT, AREA INTERNATIONAL TRADING (ENGLISH) SAYING: "As of right now with supply concerns, especially with refinery utilization, I think this is going to be a little tight and I think higher as of right now, so $100 will be the next level of crude oil and then $105, $110." Adding to the upward pressure, a fatal weekend explosion at Venezuela's largest refinery. Hurricane Isaac is expected to hit the Gulf Coast seven years after Hurricane Katrina devastated the region. Dr. Ehud Ronn of The University of Texas. SOUNDBITE: DR. EHUD RONN, DIRECTOR, CENTER FOR ENERGY FINANCE EDUCATION AND RESEARCH, THE UNIVERSITY OF TEXAS AT AUSTIN (ENGLISH) SAYING: "What we saw from Katrina and Rita was an impact of $10 per barrel in terms of the crude prices back in 2005 when they hit our oil-producing regions in the Gulf of Mexico. Potentially, we could see that same impact now but thus far, it appears Isaac has had only $3 per barrel impact which translates into seven, eight cents per gallon at the pump." NOAA, the government group that tracks hurricanes, says there could be between as many as five more hurricanes this year. With hurricane season continuing through the end of November, analysts say it could be at least a few months until the threat of hurricanes, and higher gas prices, eases up. Sasha Salama, Reuters.