It hasn’t been quite long enough for me to forget the rationals given for the high price of gasoline last summer, much less in the immediate aftermath of Katrina, nor the run-up to Rita. I remember before Katrina. Gas prices had gone up. We were told that it was due to the “summer driving season.” Also, there are different blends of gas — leaving us to deduce that summer blends are more expensive than winter blends. Then I remember being told that gas prices in part rely upon the futures market. (Ninnies I will address later.) The oil that the gas we used last summer had been bought earlier at a higher price.
I also remember that during Katrina, places like Atlanta had gas prices in the $4 to $5 dollar range. We were told that it was because the Gulf oil rigs were being threatened or damaged. But wait — the oil that the gas at the pump had come from had been bought before Katrina was in the Gulf, before any rig had been threatened. And at least outside of the Gulf Coast (see Atlanta), no interior cities were in danger of not being able to get delivery to their service stations.
Oh yes, there were other factors. Iraq was one (remember, last summer Iran wasn’t into nukes, but North Korea had been for a while, but NK doesn’t have oil.)
Before Rita hit, gas stations closed. Put plastic bags on the pump handles. It was the Thursday before the mass exodus. It was before the city of Houston became a virtual ghost town. People were willing to pay anything to get gas.
I’ve got to go check on some other things, but I promise to pull all of these threads together.