Frankenstorm Could Affect Gas Prices and Election

Two major storm systems are bearing down in what people are calling a Frankestorm Credit:[/caption]

Washington (IVN) — Gas prices spiked nationally last month, began to drop, and rose again two weeks ago. Since the latest peak on October, 11 the national average gas price has been dropping steadily, but relief may only be temporary as two major storm systems and a potential “Frankenstorm” bears down on the Northeast.

Two major storm systems will converge on the most heavily populated area of the country, and are gaining steam as they move on a collision course toward the Northeast. A large wintery storm is moving in from the West out of Canada while a category 1 hurricane, Sandy, moves North from the Caribbean.

The two are expected to crash into the New England area on Tuesday and create a storm unlike any we’ve seen since the “Perfect Storm” in 1991. In response to the incoming storms, Maryland, Virginia, and New York have declared states of emergency in response to expected days without power along with high speed winds and torrential downpours.

Aside from meteorological consequences of the storm, the “Frankenstorm” could drive eastern gas prices up once again. The domestic oil supply is at its highest level since the government started reporting inventories in 1982.

Fundamentally this would mean that costs would go down as supply goes up along with a falling demand. Except the storm may shut down as many as six refineries in Delaware, Virginia, and New York.

If these six refineries shut down, as many as 600,000 barrels worth of gasoline would go missing from the market. This would also have a devastating impact if widespread power outages occur and heating oil demand increases.

The effects of this storm could have ripples through the political world as well if Frankenstorm turns out to be as devastating as predicted. Pundits and voters may quickly turn to Katrina comparisons if the response is handled poorly. The storm could also delay early voting, forcing some states to reschedule or relocate their early voting.

Both candidates are monitoring the storm and planning their campaigns to respond to its effects. President Obama is also planning a national response to the storm system. FEMA is currently dispatching Incident Management Assistance Teams up and down the East Coast prior to the full force of the storm systems is expected to hit.