Sept. 15, 2008 -- The price of crude oil dropped below $100 a barrel today, settling at $95.71. While the price of crude is falling back to Earth from record heights of more than $147 in July, the cost of gasoline, after falling slightly, spiked over the weekend due to Hurricane Ike.
In Chicago today, gas prices reached $4.45 a gallon, while prices in Charleston, S.C., climbed up to $4.59. According to the American Automobile Association, the national average price of regular gas came to $3.84 per gallon.
"We've seen the price of gasoline jump 17 cents over the last three days," said Troy Green, manager at AAA. "This is the most gasoline has skyrocketed at one time since 2005, after Hurricane Katrina."
At one gas station in Houston today, the line of cars stretched almost a mile down the service road of I-45; people waited for more than four hours to fill up their tanks.
The wholesale price of gasoline has surged nearly 40 percent since Thursday, rising $1.50 in one day in areas directly affected by Ike.
The dramatic jump in gas prices, at a time when the price of oil is plunging, has left some consumers both confused and angry.
"If gas prices are up and oil prices are down, that doesn't really make any sense at all," Chicago resident Mark Ekstrom said.
"There's clearly a problem with the oil companies, especially with the record profits, it kind of nauseates me," said Mark Siegel, another Chicago resident.
President Bush acknowledged that as a result of Ike, consumers should expect to see "a pinch" at the pump.
"Folks [are] probably going to have to expect some upward pressure on price because the storm disrupted the supply of gasoline as a result of shutting down refineries and pipelines," Bush said.
Along the Gulf coast, the refineries in Ike's path escaped serious damage. The Louisiana State Department of Natural Resources reported today that the "basic infrastructure of the state's oil and gas industry appears to have weathered the storm with almost no damage."
But 14 refineries in the Gulf remain shut down until electricity is restored, disrupting the supply of gasoline; 99.6 percent of crude oil production, which totals 3.6 million barrels of oil per day, has been suspended due to the storm.
Officials instituted anti-price gouging laws in North Carolina, South Carolina and Kentucky last week in response to reports that some stations were charging as much as $6 a gallon for gasoline in critical areas.
Over the weekend, Florida and North Carolina launched investigations into alleged price gouging.
"Gouging for greed will not be tolerated in North Carolina," the state's attorney general, Roy Cooper, said.
The spike in gasoline prices has come even though crude oil prices today tumbled to their lowest levels since late March, as worldwide demand continues to drop.
"Even though these prices are coming down, they've come down at a time when economic growth is contracting," said Phil Flynn, vice president, energy analyst and general market analyst with Alaron Trading Corporation, a global futures trading firm.
Experts predict that gasoline prices should soon follow oil's downturn, which is good news for consumer. But the bad news is that the dropping price of oil is yet another sign that the economy -- in the United States and around the world -- is slowing down.