Gasoline prices exploded today on the New York Mercantile Exchange as traders feared that shortages would result from last week’s Alaska oil spill.
Prices for unleaded gasoline approached 69 cents a gallon at midday, increasing nearly 5 cents a gallon as traders reacted to the news that two of the top Alaska producers had taken steps to protect themselves from customers’ claims.
The soaring prices came on top of a 3.01-cents-a-gallon increase Thursday when the exchange closed at 63.19 cents, the highest price since Jan. 27, 1986. An analyst said prices were being driven by “panic buying.”
Last week, unleaded gasoline prices closed at 58.02 cents a gallon on the exchange.
On Thursday, Exxon USA and British Petroleum Co. said they were declaring last week’s Alaska oil spill, the largest in U.S. history, an “act of God” by invoking the doctrine of force majeure as a protective measure.
Today’s run-up was caused by fears that West Coast refineries are not going to have all the crude oil they need for gasoline production as the nation enters the warm weather driving season, said Joseph Tovey, of New York’s Tovey & Co.