Hurricane Ike Takes its Toll on US Oil Prices

Just as consumers were starting to breathe easier, gas prices took a huge hit as Hurricane Ike slammed into the Gulf Coast over the weekend. Areas hardest-hit by the sudden and steep increase included Michigan, a state already riddled with economic hardships in Detroit.

Statewide gas price averages in Michigan are now $4.17, which is $1.17 higher than they were a year ago, and 33 cents higher than the current national average. Hurricane Ike’s wake left 10 offshore oil platforms destroyed, and 13 refineries were idled in the state of Texas. Those refineries amount to roughly 21 percent of the nation’s total, and a significant overall chunk of domestic bulk oil production.

However, this spike in gas prices is expected to be very short-term, as the price of oil is on a continuous decline. The price of crude oil was trading at $96.80 this morning, down more than $45 from its pinnacle price in July.