Hurricane Ida is set to push up gasoline prices, which threatens consumer spending and GDP, Moody’s says

A group of people cross an intersection during Hurricane Ida on August 29, 2021 in New Orleans, Louisiana. Hurricane Ida made landfall earlier today and continues to cut across Louisiana. Hurricane Ida has been classified as a Category 4 storm with winds of 150 mph.
Hurricane Ida made landfall in Louisiana on Sunday.

  • Hurricane Ida is set to cause higher gas prices, which could weigh on consumer spending and GDP, Moody’s Analytics said.
  • Moody’s analyst Ryan Sweet said 2005’s Hurricane Katrina pushed up gas prices and knocked on spending.
  • So far the energy market’s reaction has been muted, but Moody’s said higher gas prices are coming.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Hurricane Ida is set to push up gasoline prices, which could weigh on US consumer spending and gross domestic product, Moody’s Analytics has said.

Ida made landfall on Sunday, causing widespread destruction and leaving more than 1 million people without power in Louisiana. President Joe Biden declared a “major disaster” in the state. The hurricane was downgraded to a tropical storm on Tuesday.

Moody’s Analytics analyst Ryan Sweet said in a note on Monday that Ida’s economic costs could quickly mount. “As with [2005’s] Hurricane Katrina, Ida could have a more significant impact on GDP via higher energy prices,” Sweet said.

Despite causing 96% of US oil production in the US Gulf of Mexico to shut down, according to the Department of Energy, energy markets had shown relatively little reaction to Hurricane Ida as of Tuesday. But Sweet said: “Higher prices at the pump are coming.”

Read more: These 6 trades can help investors beat the market as torrid earnings growth pushes the S&P 500 to 5,000 in 2022 – even with near-term upside limited

“After Hurricane Katrina in 2005, gasoline prices jumped from $2.61 to $3.07 per gallon,” Sweet said. “The magnitude of the increase in gasoline prices will factor into the hit to consumer spending and GDP… Real consumer spending fell in August and September 2005 because of the rise in gasoline prices.”

Yet Sweet said the hit this time around may be smaller because consumers are sitting on more than $2.5 trillion in excess savings built up during coronavirus lockdowns.

Sweet stressed the economic costs of Ida cannot yet be known. He said the overall hit to US GDP was likely to be marginal, although higher gas prices may cause more damage.

WTI crude futures, the US benchmark, were down 0.17% to $69.12 on Tuesday. The national gas price average was up a penny to $3.15 a gallon on Monday, according to the American Automobile Association.

Read the original article on Business Insider

How much gas costs in different regions of the US

gas station lines
A customer pumps gas at Costco, as a worker directs traffic, on Tuesday, May 11, 2021, in Charlotte, N.C.

  • Americans are on the move again with travel up 54.6% in April 2021 from April 2020.
  • Gas prices vary throughout the US; prices are over $3.80 per gallon on the West Coast.
  • The following map shows what gas prices are as of July 5 in seven regions across the US.
  • See more stories on Insider’s business page.

It’s summer and Americans are hitting the road and traveling again.

According to the US Energy Information Administration, travel on roads and streets is up 54.6% in April 2021 from the same time a year ago when many states had stay-at-home orders in place.

If you’re planning to take a road trip this summer or spend more time outside than last year, you may want to check out the price of gas in your area. Gas prices have climbed over the past year and as Insider’s Heather Schlitz reported, the American Automobile Association said gas prices could reach a seven-year high, increasing to $3.25 by the end of August.

Gas prices vary depending on where you live in the US.

This map shows the price of regular gasoline per gallon as of July 5, 2021 using data from the US Energy Information Administration. The map is split into Petroleum Administration for Defense Districts, or PADD regions, where each state belongs to a region. We highlighted the prices for the sub-PADDs that make up the East Coast, as the EIA data shows that prices differ within the East Coast region.

Regular gas prices in the West Coast PADD were higher than other regions at $3.84 per gallon. Regular gas prices in the Lower Atlantic PADD, which includes states like Florida and Georgia, were $2.92 per gallon.

Read the original article on Business Insider

Gas stations in some states are running out of fuel ahead of Fourth of July weekend and an oil-truck-driver shortage is to blame

GettyImages 1232845998
A woman fills gas cans at a Speedway gas station on May 12, 2021 in Benson, North Carolina.

  • Gas prices are expected to remain at their highest level since 2014 over Fourth of July weekend.
  • Some states have already reported fuel outages due to a lack of oil tank drivers.
  • As nearly 44 million Americans hit the road on the holiday weekend, the fuel shortage will be compounded.
  • See more stories on Insider’s business page.

As millions of Americans hit the road for the Fourth of July weekend, many will be forced to grapple with elevated fuel prices and a gasoline shortage.

The national average fuel price during the holiday weekend will be about $3.11 per gallon – 43% higher than this time last year and about 2% higher than Memorial Day weekend – according to a GasBuddy analysis.

There have also been several fuel outages reported at gas stations across the country. Gas stations in Northern California, Colorado, and Iowa have run out of gas, according to Tom Kloza, the global head of energy analysis for the Oil Price Information Service, told CNN. GasBuddy analyst Patrick DeHaan told the publication that Indianapolis and Columbus, Ohio have also reported gas outages and the number of stations in the US facing shortages is continuing to grow.

Nearly 44 million Americans are planning to take a road trip this holiday weekend, according to a AAA report. But, Kloza said the shortages have not been caused by a spike in demand or OPEC production rates. Instead, a shortage of oil tank truck drivers has made it difficult for gas stations to get fuel deliveries.

“It used to be an afterthought for station owners to schedule truck deliveries,” Kloza told CNN. “Now it’s job No. 1.”

Transportation is one of many industries facing a labor shortage in the wake of the pandemic. But, unlike other transportation roles, oil tank drivers are required to have special qualifications, making it even more difficult to find drivers with the necessary expertise. An analysis by the National Tank Truck Carriers in April found that 20% to 25% of oil tank trucks are not in use due to the shortage of drivers.

Independence Day weekend will likely compound the fuel shortage as demand peaks. Kloza said drivers could face the same situation they were forced to grapple with in May when the Colonial Pipeline hack pushed Americans to panic-buy gasoline, causing thousands of gas stations to run out of fuel.

GasBuddy predicts average gas prices will remain above $3 per gallon this summer and eventually fall back into a $2 national average range later in the fall.

Read the original article on Business Insider

Your Memorial Day is about to get a lot more expensive. From hot dogs to fuel, here are some of the products in short supply.

  • As the vaccination rate picks up, demand is outpacing the supplies of many key goods.
  • Americans will face several prices hikes and shortages this Memorial Day.
  • Insider rounded up all the products that may be difficult to find over the holiday weekend.
  • See more stories on Insider’s business page.

Everywhere you look, there seems to be a new shortage popping up in America’s currently very strange economy. From chicken to gas, it’s getting harder to come by items as supply-chain issues, outsized demand, and the climate crisis all converge to choke accessibility.

But as Americans learn to live in a new normal yet again – this time with vaccines, fewer masks, and slightly eased pandemic-era restrictions – demand for things like travel and hotels is on the rise. With a long weekend coming up, Americans are ready to get back into the world. But the economy may not be ready for them: Here are the shortages that could plague Memorial Day weekend.

Vacation homes

Vacation home

Vacation-home rentals in the US are at an all-time high this year.

More people are looking to travel as the vaccination rate increases. In the US, 65% of people plan to travel more this year than before the pandemic started and 82% of families have already made vacation plans, according to online rental hub Vrbo.

If you haven’t rented out a vacation home yet, it might be too late to find one this year: 85% of vacation rentals in Cape Cod, the Outer Banks, and along the Jersey shore, are booked through August, Vrbo said.

Prices for vacation homes are skyrocketing, CNBC reported last month. Rentals in premium locations are going for record sums. One house in the Hamptons rented for $2 million this summer.


Hotels and motels

hotel reception

It’s not just vacation and rental homes seeing a surge: Hotels and motels saw their costs increase by 8.8% in April, according to the Bureau of Labor Statistics.

CNBC reports that nightly prices are on the rise, and are likely only to increase as summer travel goes into full swing. In fact, prices in coveted areas, like beaches, have soared above pre-pandemic levels.

While some industries say they’re struggling to find workers and staff up, the leisure and hospitality sector actually saw notable gains in April’s jobs report. While the report came in far below expectations — with just 266,000 jobs added, instead of the expected 1 million — leisure and hospitality emerged the strongest.

The industry added 331,000 payrolls. While that’s a promising sign of recovery, some experts say even those additions aren’t coming fast enough.





Americans looking to hit the road for Memorial Day weekend will face soaring gas prices.

The price of fuel surged to a seven-year high on Wednesday. Fallout from a cyberattack on the nation’s largest fuel pipeline devastated the supply chain, pushing the average price in the US over $3 per gallon. The 5,500-mile oil pipeline reopened on Thursday, but Reuters reported it could take weeks for fuel supply to return to normal, after consumers rushed to stock up on gasoline over the week.

Prior to the cyberattack last weekend, prices were not expected to see another significant spike until after Memorial Day, when travel is expected to push demand even higher at the end of the month.

But, even before the pipeline was shut down, gas prices were skyrocketing as demand outstrips dwindling fuel supplies. In April, fuel prices leaped 9% in their largest one-month increase in nine years as shipping container shortages, port delays, and OPEC production cuts made the commodity increasingly valuable.

A new or used car

Car Dealership
New Chevys for sale fill the lot at Raymond Chevrolet in Antioch, Illinois, July 17, 2014.

If you wanted to buy a car for that summer road trip you’ve been planning since March 2020, you may find yourself up against some fierce competition — and ever-increasing prices.

New cars are in short supply due to an ongoing shortage of the computer chips that power everything from the Bluetooth in cars to iPads, and their scarcity has been felt all over the economy. Some car manufacturers had to halt production at the start of the year, leading to more elusive models and higher prices.

That’s trickled down into the used-car market. In April, used car prices jumped by 10%. Insider’s Ben Winck reported that that was the largest one-month increase since 1953, when data first started to get collected. In fact, that price jump accounted for around a third of April’s big 0.8% jump in inflation from the previous month.

Experts attribute the shortage to demand for vehicles, especially as new cars are harder to come by, and rental car services attempting to rebuild fleets; many sold off some of their cars at the onset of the pandemic. 

Rental cars are also in high demand. As Americans clamor to travel again, there’s a “perfect storm” brewing, Insider’s Brittany Chang reports.

In hot tourist destinations, prices are surging; Jonathan Weinberg, the founder and CEO of AutoSlash, told Chang that some rental cars in Hawaii are going for over $500 a day — a massive increase from the usual $50. And rental car companies are expecting strong demand over the summer for their reduced fleets, all while coming up against the computer chip shortage.

But vacation goers might still find it expensive and difficult to get around if they’re counting on rideshare drivers. Uber and Lyft have been trying to lure drivers back to work with new incentives, but there’s still a persistent driver shortage. That’s due to a variety of factors, as drivers worry about safety and find stability in enhanced stimulus benefits.


woman flight airplane mask
A woman disembarks from an airplane.

If you’re planning on jetsetting over Memorial Day weekend, you may find the shockingly low flight prices of the pandemic have vanished.

In April, airline fares increased by 10.2%, according to the Bureau of Labor Statistics

That’s not to say there aren’t deals, as airlines unleashed a week of wild international flight deals in April; the risk with those, as Insider’s Tom Pallini reported, is that it’s unclear if those countries will be open to American visitors.

But, as the Washington Post reports, it could be a different story for domestic flights, especially over the summer. Rising demand and fares could be concentrated over the summer, as Americans race to take advantage of the weather and newly loosened pandemic restrictions.

Adit Damodaran, an economist at travel booking app Hopper, told Insider’s Jamie Ditaranto that demand is concentrated around late May and early June — and that prices may rise by 15%.

Bacon and hot dogs

hot dogs on grill

Memorial Day barbeques will be impacted by the supply snags.

Bacon and hot dogs may be difficult to find in grocery stores, due to a global pig shortage. The hog industry has faced several setbacks this past year. High instances of swine decimated hog populations this past winter and COVID-19 outbreaks in at least 167 meat-processing plants forcing almost 40 plants to close as of June 2020.

Demand will likely outstrip supply as people stock up on the meat for cookouts on Memorial Day weekend.



Illegal fireworks illuminate the sky over the Bedford-Stuyvesant neighborhood of the Brooklyn borough of New York City, New York, U.S., June 19, 2020. REUTERS/Lucas Jackson

It will be more expensive to celebrate the holiday with fireworks this year.

Superior Fireworks announced they were increasing their prices about 15% this year — the highest the company has ever had to hike prices in its 20-year history.

The company is one of many fireworks producers that have been forced to raise prices in order to compensate for higher shipping and production costs.


Lodge at Kukuiula
The property’s infinity pool.

Vacationers looking to relax in the pool during the holiday weekend may face difficulty finding clean pools.

Last month CNBC reported the US is facing the worst chlorine shortage in history. Prices for the chemical used to clean pools has nearly doubled this past year and is only expected to continue to rise with warm weather.

Pool owners can avoid the shortage by using saltwater pools instead, according to Insider’s Annabelle Williams.

Imported goods like wine and cheese

food membership
wine with cheese

Vacationers will pay top dollar for imported food.

Good from overseas, including seafood, cheese, and wine are facing months of shipping delays. Some grocery stores, including Costco have already reported shortage of imported food, while other companies have already begun to hike prices in response.

Last month, Coca-Cola and General Mills announced they were raising their prices.

Restaurant service

los angeles outdoor dining
A waitress takes customers’ orders in the outdoor seating area of a restaurant on January 28, 2021 in Los Angeles.

People looking to eat out over the holiday weekend may find difficulty getting service at local restaurants.

Major labor shortages have rocked the restaurant industry. After laying off millions of workers at the onset of the pandemic, many restaurants are struggling to bring workers back as they reopen.

Restaurant chains have rolled out new incentives to lure employees back, according to Insider’s Kate Taylor. But, many frontline workers are hesitant to return to work over concerns regarding COVID-19 safety, as well as childcare, Insider’s Ayelet Sheffey reported.

Read the original article on Business Insider

The Colonial Pipeline is back up, but gas shortages have gotten worse and it’ll take time to make up the shortfall

gas station lines
A customer pumps gas at Costco, as a worker directs traffic, on Tuesday, May 11, 2021, in Charlotte, N.C.

  • The Colonial Pipeline shut down for several days after a cyberattack and was restored on Wednesday.
  • The pipeline transports nearly half of all fuel on the east coast of the US.
  • It will likely take days to weeks for gas stations to return to normal.
  • See more stories on Insider’s business page.

The Colonial Pipeline was back in action Wednesday night after a cyberattack led to gas shortages and outages across the East Coast, but experts warn it could take days to weeks for gas prices and availability to return to normal.

The Colonial Pipeline is the largest pipeline of refined oil products in the US, transporting over 45% of all fuel used on the East Coast (when not affected by a cyberattack) to more than 50 million people.

Following the hack and pipeline shutdown, several states declared states of emergency because of gas shortages, including North Carolina, Georgia, and Virginia. As shortages and outages swept the coast, gas prices skyrocketed.

AAA’s website noted that national gas prices hit an average of $3.03 on Thursday, the highest level since 2014.

US Energy Secretary Jennifer Granholm announced on Thursday morning that the attempt to restart the pipeline on Wednesday night was a success.

Read more: A strategist who timed the March 2020 market bottom for a $32 billion money manager breaks down 2 ways investors can capitalize on the Colonial Pipeline attack

Echoing Granholm’s tweet, the Colonial Pipeline also released a statement on Thursday to say that each market it services should begin to receive petroleum products from the pipeline by midday.

Still, experts predict that it will take days to weeks for gas availability to return to normal – partly because people have been panic-buying and hoarding gas.

Patrick De Haan, the head of petroleum analysis at GasBuddy, said Georgia, North Carolina, South Carolina, and Virginia will likely take the longest to recover.

Previous reports suggested that Colonial Pipeline would not pay the $5 million in ransom requested by the hacking group behind the attack, DarkSide, but a new report from Bloomberg indicates that the company paid the ransom in cryptocurrency “within hours” of the attack.

The hacking group behind the cyberattack, DarkSide, received $5 million in ransom from Colonial Pipeline, Bloomberg reported.

Since the attack, Colonial Pipeline’s website has added a CAPTCHA security check before entering the site, seemingly in an effort to prevent a future hack. The company has been searching for a cybersecurity manager for at least 30 days, according to a posting on the company’s open job listings.

Read the original article on Business Insider

Colonial Pipeline restarts operations, but says supply chain issues may continue for ‘several days’

Fuel holding tanks are seen at Colonial Pipeline's Linden Junction Tank Farm on May 10, 2021 in Woodbridge, New Jersey. Alpharetta, Georgia-based Colonial Pipeline, which has the largest fuel pipeline, was forced to shut down its oil and gas pipeline system on Friday after a ransomware attack that has slowed down the transportation of oil in the eastern U.S. On Sunday, the federal government announced an emergency declaration that extends through June 8th and can be renewed. On Monday, the FBI confirmed that the cyberattack was carried out by DarkSide, a cybercrime gang believed to operate out of Russia.
Colonial Pipeline, was forced to shut down its oil and gas pipeline system on Friday after a ransomware attack that has slowed down the transportation of oil across the Eastern US.

Colonial Pipeline said in a press release on Wednesday it had “initiated the restart of pipeline operations” at approximately 5 p.m. ET.

“Following this restart, it will take several days for the product delivery supply chain to return to normal. Some markets served by Colonial Pipeline may experience, or continue to experience, intermittent service interruptions during the start-up period,” the company said.

“Colonial will move as much gasoline, diesel, and jet fuel as is safely possible and will continue to do so until markets return to normal,” it said, adding that it’s conducting various safety assessments as it resumes operations.

The announcement follows widespread gas shortages across the eastern US that resulted from the pipeline being taken offline by a crippling ransomware attack.

The 5,500-mile network supplies around 45% of the East Coast’s fuel, and more than 1,000 gas stations ran dry following the attack, creating long lines and sending prices soaring past $3 per gallon for the first time since 2014.

The Biden administration has been working with Colonial to get operations restarted. The Russia-based hacking group DarkSide acknowledged it launched the attack, saying it didn’t intend to cause “problems for society,” and would approach targets differently in the future.

Read the original article on Business Insider

More than 1,000 gas stations ran dry, with massive lines, after a cyberattack knocked the crucial fuel pipeline to the East Coast

gas station lines
Big lines at a Costco gas station on May 11, 2021, in Charlotte, North Carolina.

  • Gas stations across the US are running out in the wake of a crippling cyberattack.
  • The Colonial Pipeline that supplies the East Coast has been down since it was hacked last week.
  • Its operators expect to restore service soon. In the meantime, many are panic-buying.
  • See more stories on Insider’s business page.

More than 1,000 gas stations in eastern US states ran out of gasoline after a cyberattack knocked out a crucial US pipeline which supplies much of the region’s gasoline.

Price rises and panic-buying followed the news, which led to widespread shortages as operators struggled to move fuel supplies without the out-of-action Colonial Pipeline.

According to the app GasBuddy, as of late Wednesday the worst-hit states were North Carolina, where 16% of stations were out of gas, Georgia, where 10.4% were empty, and Virginia, where 10.2% had run out.

The figures were an increase on those released only 5 hours previously, with the percentage of gas stations that were empty in North Carolina increasing by 2% in North Carolina and about 1% in Georgia and Virginia respectively.

Citing data from S&P’s Oil Price Information Service, The Associated Press reported that at least 1,000 gas stations had run out of gasoline by Tuesday.

People told CBS News that at some gas stations in South Carolina lines were more than an hour long.

Some motorists recorded long lines snaking out of gas stations.

The crunch in fuel supply was caused by a ransomware attack on Friday that forced the closure of part of the Colonial Pipeline. The 5,500-mile network supplies about 45% of the East Coast’s fuel.

The Biden administration has said the pipeline will be working again in the next few days, and has urged Americans not to stockpile fuel.

“We are asking people not to hoard,” US Energy Secretary Jennifer Granholm told reporters at the White House. “Things will be back to normal soon.”

Colonial in a statement said it hopes to re-open the pipeline by Friday. It has taken a delivery of an extra 2 million barrels in fuel to deploy when the pipeline is opened, reported Reuters.

The shortage has seen prices for unleaded gas rise to an average of $2.99 a gallon, the highest since 2014, The American Automobile Association said.

Read the original article on Business Insider

Luxury items like watches and jewelry are getting even more expensive

luxury jewelry covid
  • The cost of goods in the US saw its largest monthly increase since 2012.
  • Jewelry and watches were among several items that saw a significant price boost.
  • Prices are expected to continue rising in the coming months as vaccination levels increase.
  • See more stories on Insider’s business page.

Luxury items became even more expensive last month as the price of goods in the US saw its highest monthly increase in nearly 9 years, according to the US Bureau and Labor Statistics’ Consumer Price Index.

Jewelry and watches were among several items that pushed the overall surge in prices. The cost of jewelry in the US rose 7.4% from the previous year and nearly 6% between February and March, according to the index.

Similarly, the price of watches also rose 4.3% from 2020 and 2.4% in the past month alone.

While the price increase might not seem particularly high on a surface level, they could put a further strain on the wallets of people buying big-ticket items.

If applied to the average price of a Rolex in 2020 – which falls around $12,000, according to Wrist Advisor – rising prices mean buyers can add about $500 to the price tag.

And that’s just for the average buyer. Customers looking to purchase even more pricey watches, like Rolex’s $75,000 model, would have to tack on an additional $3,000 to that price tag.

Similarly, for couples looking to buy a diamond engagement ring – an item with an average price around $5,000, according to Jewelry Wise – buyers can expect to pay an additional $370 this year, or even see a price increase of $285 from the previous month.

Prices in the US are only expected to continue to rise in the coming months, as increased vaccination rates allow the economy to reopen and demand to surge.

The cost of goods has also been impacted by several supply disruptions, including a shipping container shortage, port delays in California, and the impact of the Texas freeze on production in the state. Many companies are also still struggling to meet demand after cutting back on production due to COVID-19 shutdowns last year.

Outside of watch and jewelry prices, the Consumer Price Index showed several other goods had significant price increases, in particular fuel and food. Gas prices jumped over 9% in the past month and drove the largest increase in the index.

Overall, prices rose over last year at their highest rate since 2018, beating analysts estimates. The index rose 0.6%, while analysts estimated a 0.5% increase, according to Dow Jones estimates.

Read the original article on Business Insider