ROCKINGHAM – The drone attacks on two major Saudi Arabian oil facilities have caused some volatility in oil prices over the last week.
The attacks have taken 5.7 million (crude) barrels per day off the market, accounting for about 6% of the global supply, according to AAA.
“Increases will most likely continue but may vary regionally and by local markets due to varying transportation costs and the switch over – throughout this month – to less expensive winter blend gasoline,” said Tiffany Wright, AAA Carolinas spokesperson. “While the national average could reach $2.75 this month, we hope to see lower prices across the Carolinas.”
North Carolina’s state average is $2.45 and South Carolina’s is $2.36, both down a cent on the week. In Richmond County, the lowest price Friday was $2.32 at a station in Hamlet, according to GasBuddy.com, while the average in the county is $2.40.
Between Tuesday and Wednesday, North Carolina’s average gas price jumped $0.06, AAA data shows.
Gene McLaurin, President of Swink Quality Oil, which supplies a dozen gas stations in Richmond County, said gas prices have started to stabilize after wholesale oil prices increased by about $0.07 per gallon earlier in the week. Still, prices Friday were up about $0.10 from where they were last week due to the attacks, according to McLaurin.
Ricky Patel, who manages the Lucky Stop on East Broad Avenue in Rockingham, said that since they are supplied by a smaller company, Great Lakes Petroleum out of Charlotte, they didn’t see as much volatility. Patel said their prices increase by about $0.05 per gallon this week but doesn’t expect much more fluctuations.
“Whether this increase is a short or long-term trend will be determined by how quickly the facilities in Saudi Arabia can recover and get back online,” AAA said in a press release. “Damage to the facilities is still being accessed, but there is no word if it will be days, weeks or even months before infrastructure is repaired.”
President Donald Trump this week authorized the release of crude from the Strategic Petroleum Reserve to mitigate the losses.
Prior to the attacks, global crude oil supply was very healthy, in fact sitting on a global glut of stocks. Regardless, initial market reaction to the attacks spiked crude oil prices, according to AAA.